I am curious just how long the average small electrical contractor waits to get payed for completed jobs. I am in north central Florida, non-union, and we can't seem to get payed any sooner than 30-60 days out. Apparently all the CM's and GC's want to wait until they get payed and I just can't see how that should effect their subs so much. It's hard enough for a small outfit to make payroll and supply bills monthly but when you don't get payed for another 45 days after the job has been completed it becomes juast about too hard to maintain at times. I am wondering if any of you guys have experienced similar issues and what solution was found if anything. it seems that if all the EC's and other subs would uniformly put this into their contracts it would be easier to enforce it but around here everyone is scared to death of not getting a job because they are simply asking to be payed upon completion of the contractual work agreed upon. any info would be great! frustrated-Justin
payment!!?
- Thread starter justin
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Re: payment!!?
i front loaded my contracts as much as possible so that the final was not part of my operating capital. Never started a job for someone with outstanding balance, but then again i never got rich, wasn't as busy as some guys, never got ulcers, didn't drive trick trucks, had other interests. pluses and minuses
There was asimilar thread just a bit back
paul
i front loaded my contracts as much as possible so that the final was not part of my operating capital. Never started a job for someone with outstanding balance, but then again i never got rich, wasn't as busy as some guys, never got ulcers, didn't drive trick trucks, had other interests. pluses and minuses
There was asimilar thread just a bit back
paul
goldstar
Senior Member
- Location
- New Jersey
- Occupation
- Electrical Contractor
Re: payment!!?
I think we might have discussed this topic or a similar one before but my answer is still the same. (Please understand that this is my own opinion and not meant to be derogatory in any way). If you take a job where there is a CM and/or GC you are a second or third level sub-contractor and as such you are subject to the same payment schedules they are (although I don't believe they are truthful and forthcoming as to exactly when they get paid). I say that because on large jobs they usually have explicit payment and performance schedules (the particulars of which sub-contractors never seem to know about) in place and agreed upon long before they start the job. Unless they are willing to share that information with you, you are obviously at a disadvantage and if you are not capitalized to the point where you can run your company for several months without the cash flow that this job will generate then, in all probability, you shouldn't have taken the job.
Having said that, the best way I see getting around this is to be in on the payment and performance agreements up front so that you know when the payments are made and when you can expect yours. A less favorable way is to make arrangements with your bank for a loan so that you can "bridge" the gap in cash flow until you can get paid from the GC. The dangerous part of this is that if the CG goes "bust" - so do you.
You're on the hook for the $$$ you didn't get from him and the loan you took out from the bank.
I wish I could give you a better outlook on this but if you get into doing a lot of public bid work this is what you can expect.
I think we might have discussed this topic or a similar one before but my answer is still the same. (Please understand that this is my own opinion and not meant to be derogatory in any way). If you take a job where there is a CM and/or GC you are a second or third level sub-contractor and as such you are subject to the same payment schedules they are (although I don't believe they are truthful and forthcoming as to exactly when they get paid). I say that because on large jobs they usually have explicit payment and performance schedules (the particulars of which sub-contractors never seem to know about) in place and agreed upon long before they start the job. Unless they are willing to share that information with you, you are obviously at a disadvantage and if you are not capitalized to the point where you can run your company for several months without the cash flow that this job will generate then, in all probability, you shouldn't have taken the job.
Having said that, the best way I see getting around this is to be in on the payment and performance agreements up front so that you know when the payments are made and when you can expect yours. A less favorable way is to make arrangements with your bank for a loan so that you can "bridge" the gap in cash flow until you can get paid from the GC. The dangerous part of this is that if the CG goes "bust" - so do you.
You're on the hook for the $$$ you didn't get from him and the loan you took out from the bank.I wish I could give you a better outlook on this but if you get into doing a lot of public bid work this is what you can expect.
electricmanscott
Senior Member
- Location
- Boston, MA
Re: payment!!?
Go buy something, have your car repaired etc. Then tell them you will pay in 30-60 days. Not happening. I try to get as much as I can as soon as I can. With homeowners I ask for a check before I leave their house. Some seem genuinely surprised that I want to be paid. The work is done you pay for it. Whats so hard to understand about that? :roll:
Go buy something, have your car repaired etc. Then tell them you will pay in 30-60 days. Not happening. I try to get as much as I can as soon as I can. With homeowners I ask for a check before I leave their house. Some seem genuinely surprised that I want to be paid. The work is done you pay for it. Whats so hard to understand about that? :roll:
bphgravity
Senior Member
- Location
- Florida
Re: payment!!?
I do alot of work for Realty agencies that do not make payments for work performed until the closing of a sale, or until the rent is payed by the tenant, or until the owner send the money.
This process can take up to 45 days. If I do work today, I won't see that money for a few weeks, but I am also expecting payment today for work done a few weeks ago. So its a complicated cycle, but it does work out.
I feel its an associated risk with doing this type work. I know my supply houses have delayed payment scheduleds that in some cases can extend to 60 days. This also helps in the occassion of slow payment.
I do alot of work for Realty agencies that do not make payments for work performed until the closing of a sale, or until the rent is payed by the tenant, or until the owner send the money.
This process can take up to 45 days. If I do work today, I won't see that money for a few weeks, but I am also expecting payment today for work done a few weeks ago. So its a complicated cycle, but it does work out.
I feel its an associated risk with doing this type work. I know my supply houses have delayed payment scheduleds that in some cases can extend to 60 days. This also helps in the occassion of slow payment.
jimwalker
Senior Member
- Location
- TAMPA FLORIDA
Re: payment!!?
try it this way.Raise your bid by 2 or 3 % then add a clause if paid in full within 10 days deduct 2 or 3 %.Give then a reason to pay fast.I had contractors that paid as soon as permit was signed often before the ink dried.Works good for them too as you will bump some one else to go do there job first.Also add clause for late pay penalty after 30 days
try it this way.Raise your bid by 2 or 3 % then add a clause if paid in full within 10 days deduct 2 or 3 %.Give then a reason to pay fast.I had contractors that paid as soon as permit was signed often before the ink dried.Works good for them too as you will bump some one else to go do there job first.Also add clause for late pay penalty after 30 days
Re: payment!!?
Justin, ALWAYS send a 15 day preliminary notice after you start the job, This gets everyone's attention. It also gives you the right to charge INTREST if not paid. You can lein the property and be part owner in the real estate business. I know it may take some time but eventually they will refi or sell or pull a second, you will then be paid, with interest. Be sure to file the prelim and then the lein if not paid. You also may, depending the state, have to renew you claim every 1-2 years. It's better intrest than the bank!! If you can handle it!
Monk
Justin, ALWAYS send a 15 day preliminary notice after you start the job, This gets everyone's attention. It also gives you the right to charge INTREST if not paid. You can lein the property and be part owner in the real estate business. I know it may take some time but eventually they will refi or sell or pull a second, you will then be paid, with interest. Be sure to file the prelim and then the lein if not paid. You also may, depending the state, have to renew you claim every 1-2 years. It's better intrest than the bank!! If you can handle it!
Monk
electricmanscott
Senior Member
- Location
- Boston, MA
Re: payment!!?
How about when they call for more work to be done you tell them it will be X # of days till you can get there. X will be however long it took to get paid last time.
How about when they call for more work to be done you tell them it will be X # of days till you can get there. X will be however long it took to get paid last time.
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