Need some advice

Status
Not open for further replies.
Oakey

Oakey

Senior Member
Location
New Jersey
Hypothetically I had a builder who asked me recently to add 10% to the extras bill and then he would pay me 10% less. Said it would decrease his bottom line. Hes a good builder but what do you guys do when you run across this?
 
Restoration companies are famous for that. They know exactly to the penny almost how much an insurance company will pay for given work, so they tell you to add X amount and "they'll split it with you". That's insurance fraud. I'm not sure what the inside scoop in on your deal there.
 
Hmmmm. Let's do some math here. I'll use an easy number to start with.

Original bill : $1,000. Add 10%, or $100. Bill is now $1,100.

Subtract 10% of 1100, or $110. Bill is now $990.



Hey, builder just got his lunch paid for! Pretty neat trick there!
 
480sparky said:
Hmmmm. Let's do some math here. I'll use an easy number to start with.

Original bill : $1,000. Add 10%, or $100. Bill is now $1,100.

Subtract 10% of 1100, or $110. Bill is now $990.



Hey, builder just got his lunch paid for! Pretty neat trick there!
Click to expand...
Sounds like a typical builder!
 
480sparky said:
Hmmmm. Let's do some math here. I'll use an easy number to start with.

Original bill : $1,000. Add 10%, or $100. Bill is now $1,100.

Subtract 10% of 1100, or $110. Bill is now $990.



Hey, builder just got his lunch paid for! Pretty neat trick there!
Click to expand...
I hope that's not what he meant. It might be, though. I've never heard of such a scheme. That doesn't really make for development of a group of loyal and reliable subs.
 
Oakey said:
Hypothetically I had a builder who asked me recently to add 10% to the extras bill and then he would pay me 10% less. Said it would decrease his bottom line. Hes a good builder but what do you guys do when you run across this?
Click to expand...

So the 20% goes in his pocket from both you and the customer? Or you bill 10% more - then you get what you were supposed to get?

IMO if he wants to decieve the customer into believing that he's not marking your work up, then he should take the bill you give him and fudge it himself. Or just be honest and show the mark-up for coordination or what-ever he thinks he can justify the cost as... Why have you do the dirty work for him? It makes your prices seem artificially high when he's taking $10 of every hundred, or $100 of every thousand, or a $1000 of every ten thousand on top of you. Without disclosure it is called fraud IMO. What happens if the cusomer questions your bill? "Oh thats $XX,XXX.XX plus the ten percent kick back for the mobster over-there who just got back from Barbados."

While the practice is fairly common place these days - I don't exactly like it. :mad: So what do you do? Under-state your income to the tax man or use the second set of books? What does he do? Launders the money and stuffs a matress with it?

As a sub - the bill does not have to go to the customer, what the GC puts on his own billing is up to him IMO.
 
Oakey said:
Said it would decrease his bottom line.
Click to expand...

HUH?

That makes no sense.

Edit: OH, now I get it. He has an invoice for 100% and you get paid 90%. How do you get that 10% off of your books, write it off as a bad debt? Umm, ...........
 
Last edited:
480sparky said:
Original bill : $1,000. Add 10%, or $100. Bill is now $1,100.

Subtract 10% of 1100, or $110. Bill is now $990.
Click to expand...
I did the exact same thing with the exact same numbers as I was reading the OP. :)

Oakey said:
Hypothetically I had a builder who asked me recently to add 10% to the extras bill and then he would pay me 10% less.
Click to expand...
Tell him you'll compromise with him: You'll add only 5% to the extras bill, and he won't have to do the 5% deduction.
 
This is kind of like buying a job.

If he thinks he should get paid for making sure that you do what you're supposed to, then he should include it on his bill and not yours.

I once had a job and I brought in the GC, he called and asked, "so how much do you want me to put in for you?". I told him nothing, I've already got my profit figured in my bid.

I didn't want him to over bid or cut into his profit just because I was giving him work.
 
You're not getting any money from this deal. It's obvious this general is trying to put some extra money in his pocket. I wouldn't do it myself. Here you are cheating the customer and then your not getting anything out of it. LOL!
 
Thx for the tips guys I really appreciate it. The reply he allegedly gave me was "I get charged more from my insurance Co showing that amount" and "all my subs do it". It seems you guys have hit it right on the head..a few extra bucks in fattys pocket for the "job privilege". Im shocked, it never seemed to be that way in our setup, only heard of it from other guys. I guess this is a good thread for newer contractors like myself , an akward part of business I've never seen before. I need to deal with this though
 
Never do anything that doesn't sound right. Never do some thing that'll give anybody something on you. Never do something that could come back and bite you in the derriere. It's the best way to make sure you'll always get a peaceful nights sleep.
Words of wisdom from my Pop,RIP.
 
LarryFine said:
Also, watch the movie Serpico.
Click to expand...
The Mary Schmich essay in 1997, "Advice, like youth, probably just wasted on the young", has some additional good advice. This essay was turned into the lyrics of a Baz Luhrmann spoken word song later that year called "Everybody's Free (To Wear Sunscreen)". Among my favorite passages in that essay is, " Be careful whose advice you buy, but be patient with those who supply it. Advice is a form of nostalgia. Dispensing it is a way of fishing the past from the disposal, wiping it off, painting over the ugly parts and recycling it for more than it's worth."
 
For the record, Im not going to do this. I just need to know what to say to a persons face and not lose the acct should this ever happen.
 
Last edited:
glad you made the decision that you did...but if you were to do it, simply add 10% margin. Then when he deducts 10%, you are at your original amount...

i.e. $1000 / (1.00 - 0.10) =$1,111.11

so when he takes 10%....
$1,111.11 * 10% = $111.11

so the net total would be....
$1,111.11 - $111.11 = $1,000
 
mdshunk said:
" Be careful whose advice you buy, but be patient with those who supply it. Advice is a form of nostalgia. Dispensing it is a way of fishing the past from the disposal, wiping it off, painting over the ugly parts and recycling it for more than it's worth."
Click to expand...
Sounds like eBay! ;)
 
Status
Not open for further replies.
Top