Residential work payments

[JoeNorm]

Hi,

I am wondering what a reasonable time frame is to expect a payment in a residential setting? For the most part this is a non-issue and I am paid within a day to a week. But sometimes it stretches closer to a month. At what point do you bug the client and make sure they remember they owe you money?

Is there an industry standard for the amount of time you give someone? All my invoices are "pay upon receipt"

thanks

 

[Dennis Alwon]

I always gave a month but would contact the customer with an email as a reminder after about 3 1/2 weeks. Then the phone calls asking if there is an issue.

I worked with a lot of builders for many years. Some paid on the 10th of the month but your bill had to be in by the last day of the previous month. Thus if your bill went in on Aug 31 you would be paid on Sept 10 but if the bill was in by Sept 1 you would have to wait until Oct 10.

Some builders paid within a week some within 2 weeks. I had one that would often be late who always needed a reminder but I knew I would get paid. so I didn't bug them. I did tell them I would charge a bit more for being their bank. They didn't seem to care

 

[ptonsparky]

Expect 30 days, be grateful if less.
I swear some paid before I sent the bill!!

 

[Little Bill]

99% of the time, I emailed invoices. If not paid within a week or so, I would follow up with an email asking if I got their email address correct. Then, if not paid within another 2 weeks, I would ask if a check had been mailed, stating I hadn't received it and wondered if the check had been stolen.
Usually, I didn't have to go any further as that was enough reminder. Only had to call a few people, maybe 2 or 3, to ask if there was a problem.
But on residential, 2 to 3 weeks wouldn't be a stretch. I normally got paid sooner than that. If it was just a service call, I would get paid on the spot and email them a receipt/invoice.

On jobs where I didn't know exactly what the invoice would be, I liked to email the invoice even tho the customer wanted to pay on the spot. I found I always forgot something trying to make the invoice in a hurry to get paid. So I wanted to sit down at my office and go over everything slowly so I didn't leave something off, or charge them for something I didn't supply, or use. So I expected a delay in payment since I didn't take payment on the spot. Usually got a check within days of sending the invoice.

 

[James L]

New construction 4 - 6 weeks
Remodel subbing 2 - 3 weeks
End user less than 2 weeks

The funny thing about that, the less money you make per hour the longer you have to wait to get it

 

[Eddie702]

33% before the job starts ...you have to order and pay for the material
33% when the job is substantially complete
33% 30 days from completion

 

[LarryFine]

For a large contract job, I'll typically do 30% down, 30% after rough-in/inspection, 30% after final/inspection, and 10% for any punch-list items.

 

[Birken Vogt]

Only 10% down is allowed in California

A certain amount when permits are completed, they take a lot of work and we charge for that

A hefty check due when major expensive materials are delivered on site and any work completed up to that point

Most of the balance on substantial completion

Final balance on day of final

We try to collect these payments from the customer on the very day.

 

[letgomywago]

Hi,

I am wondering what a reasonable time frame is to expect a payment in a residential setting? For the most part this is a non-issue and I am paid within a day to a week. But sometimes it stretches closer to a month. At what point do you bug the client and make sure they remember they owe you money?

Is there an industry standard for the amount of time you give someone? All my invoices are "pay upon receipt"

thanks

My contracts say 10 days or a late fee will be added. Rarely got over 10 days. I can see 1 month being the norm with bank draws and some big stuff is net 30 net 60 net 90. People I know who deal with it charge more or bill before completion just when starting so the accounting works it's magic in time.

 

[sparky1118]

Hi,

I am wondering what a reasonable time frame is to expect a payment in a residential setting? For the most part this is a non-issue and I am paid within a day to a week. But sometimes it stretches closer to a month. At what point do you bug the client and make sure they remember they owe you money?

Is there an industry standard for the amount of time you give someone? All my invoices are "pay upon receipt"

thanks

On my invoices I always put a payment schedule
30% upon starting the job
30% after rough inspection
30% to begin finish work
Remaining 10% after final inspection


Sent from my iPhone using Tapatalk Pro

 

[kwired]

Only 10% down is allowed in California

Once you have material on site I would hope you can collect at least an amount that is considered fair for said material as well as any labor amount that corresponds to what has been completed at time of invoicing.

I would also assume that 10% is max you can legally demand, customer certainly can pay for more if they wish.

 

[JohnE]

For me it depends on who the job is for. For my regular builders, whether it is new construction or a renovation/ addition, I bill 70% upon substantial completion of the rough wiring. Balance upon substantial completion of the finish wiring. The service is part of the 70%, whether it is done before or after the rough wiring. (underground is a separate invoice, typically) My regulars pay me within 7-14 days, and I'm priced accordingly.

I don't do much for people I don't already know and work for, but it happens occasionally. But it happens, and when it does and I'm skeptical, I'll bill 20% for a deposit, 50% after rough wiring, 15% upon start of the finish wiring, and 15% upon completion. And the rate is 20% more than my normal customers pay, for multiple reasons. The biggest reason is that there will be a lot of time wasted as my regulars schedule myself and other trades very efficiently.

 

[augie47]

Thankfully I did very little residential. The primary payment schedule I noted was the more affluent the customer, the slower the payment
If i was not paid at the time of service, 2 -3 weeks was normal except for lawyers and doctors.

 

[Eddie702]

Depends on the size of the job. For small jobs 1 invoice 30 days is standard.

Larger jobs that stretch out (waiting for drywall etc) I would bill the rough and service as 1 invoice, finish as 1 invoice. The longer it drags out the more bills

 

[zbang]

There is no one-size-fits-all.

Missing from all that is the local customs and size of the job- in some areas people may want to pay for that new light before you leave, others they'll sssstttrrrettttcccchhhhh it out. Another part is how easy you make it- only taking checks may delay a lot small-job of payments; for instance, I still write checks but mostly do it through the bank's bill-pay system, if you want one at the door it'll take some time to find the check paper and get the computer to print it.

 

[Birken Vogt]

Once you have material on site I would hope you can collect at least an amount that is considered fair for said material as well as any labor amount that corresponds to what has been completed at time of invoicing.

I would also assume that 10% is max you can legally demand, customer certainly can pay for more if they wish.

You bet we do. We do generators so that is a lot of money sitting on the customer's property right out the gate, I want it to be their responsibility, not ours. It is all spelled out in progress payments in the contract that they read, sign, and initial next to important details.