Payment Terms

Payment Terms?

  • Entire amount- 30 days

    Votes: 22 44.0%
  • Entire amount-10 days

    Votes: 12 24.0%
  • part down/balance on completion

    Votes: 8 16.0%
  • CASH ONLY !!

    Votes: 8 16.0%

  • Total voters
    50

Shawn G.

New member
We use net 10 days with 1 1/2% penalty for commercial, and 50% down/balance on completion for residential work.

Have not had a problem yet, but we're starting to do some bids for condo associations and developers. Have heard that historically, these are toughest to collect. Do we go with net 10 on these also? Would help the cash flow if we used a percentage down and terms for the balance.

Any thoughts?
 

Beth & Rod

SR Wood Geek / Moderator
Different states have different laws and regulations. In Maryland, we can ask for up to 1/3 down with the balance upon completion. It's important for each contractor to make sure and check to see what applies in their state.

We also use different terms for different accounts.

Just remember one thing. Credit is a privilidge not an automatic or given. More importantly, you aren't a bank. Don't finance like one.

It is not unreasonable to set limits for large accounts, to review their history, or to rais or lower the limits you give them.

Some companies offer discounts for prompt payment also, for example if a balance is paid in ten days they get 2% off the balance.

Beth
:cool:
 

Shawn G.

New member
Hi Beth,

Does the 1/3 rule apply to residential work also? The way I understood it, you can demand payment up front for anyone who you feel is a credit risk. We sometimes do less down for people we know, but for those we do not know we do 50% or cash up front.

Shawn
 

Beth & Rod

SR Wood Geek / Moderator
In Maryland it is 1/3 across the board.
We have not had too much problem with non-payment, although one woman does not yet know she is going to be sued. Rather than waste my time making phone calls for 6 months, I'll just slap a lein on her house......

Beth
:D
 

Jon

Member Specialist
I bill on 30 days payment, most accounts pay way before that, the few residential jobs I do is COD.

I have or am finding that a few major national retailers love to drag out the payments, 30,60,90 and like Beth said we are not banks and should not expect to be treated as one.

However the one thing I also have noticed is if we can carry them they will continue to use you monthly and always have a check in the mail even it if is for the job you did 90 days ago.

It is steady so I deal with it, would love to charge interest but not sure if they would keep me or not.

How would you approach and ask the accounts payable department such a question, the paying of interest, not if they would keep giving me work.
 

Shawn G.

New member
Jon,

We state right on our invoice that overdue accounts will be charged a 1 1/2% per month, late fee. Our terms are printed in BOLD letters right on the top section of the invoice.

We haven't had to charge anyone, but it has been helpful when calling to collect. Just mention to the accounts payable person that late fee will be your next step. Our calls go out if an invoice gets to 30 days. (terms are net 10 days, but we can live with 30 if we have to.) This is mostly just a scare tactic to fall back on if you get the feeling that someone is stringing you along, or will refuse to pay a bill.

We usually get the "sorry....oversight" excuse and then a check within a couple of days.

Shawn
 

John B

New member
For $ 21.95 a month I use a credit card machine that hooks to my sell phone and then to my office computer.. When someone ask do we take credit . I say yes visa, master card.. We also have 30 day accounts but only with strict credit checks.. What's the use n cleaning hoods and not getting paid right.

I had acustomer ask why he had to submit a credit app to us for only $300.00 dolloar hood cleanings every 3 months.. So I told him to go in any bank and say " I want to borrow $ 300.00 but I Am not going to fill anything out and I refuse to let you check my credit .. but hey I will pay you back in 30 days I promise """ LOL>>>

We all provide a service so do yourself a favor Check the credibility of your customers you will be suprised..
 

Jonathan Ellis

moderator
Payments within 48 hours

I have been in business now for over two years and have had some problems with getting money out of companies. In fact, I just received a check from a company that I have not done business with in over one year. Most other companies are good about paying. My largest company gets me paid about every 2-3 weeks. Not bad... However I have just embarked upon a new business. Now my payments come in from every company (even those that are net 45 days) within 48 hours of my invoice being sent out. If I would have known about this two years ago I would still have some companies today that I gave up due to late payment of invoices.


Double Guarantee Pressure Washing
Jonathan S. Ellis
823 Walden Run Place
McDonough, GA 30253
678-522-3182
doubleguaranteepw@yahoo.com
 

smittie1984

New member
I've always did the work then got paid

I don't ask for money upfront but I do expect a Check or Cash for when I leave a job if the resident is home. If they are not home I leave an invoice with payment instructions and where to send the money too. But usually I am at the job when the homeowner is home so I have only done that a few times. And all times I had the check/cash at my house within a week.

Though it has never happened to me(Knock on wood) I have thought to myself how I would handle it. If I didn't recieve a check within 2 weeks I would call the person. If they still didn't pay me after a week from that I would visit them in the evening and ask them face to face. And then give them 1 more week. After that, that particular individual is going to have problems. I'll visit them 1 more time and let them know and understand I mean business and if they don't have the money to tell me now and I'll be glad to work something out.

Now if they refuse to pay me I will get very mad. Because I consider that stealing. Which is one of the things I hate the most. I can't stand crooks. I feel that people who are caught stealing should be given capital punishment Because they are taking time out of my life. Because everything cost money and to make money takes time. From working my regular job it would take me about 3 days to get enough money for a $200 TV.

Sorry about my rant. But if someone was to get beligerant with me and refused to pay me I would take drastic measures. I don't have the money to pay a lawyer $3000 to get $150.

Now I did have 1 check that I was getting worried about. It was from a builder. I was patient with him because I figured he was more worried about the $30k+ checks he was writing compared to my $100 check. But it finally came through. You can check out the whole story behind it in an Earlier Post I Had

Now when I get bigger and start doing commercial accounts I know I'll have to deal with that. And I do not look forward to that at all. So if I can stay residential I'm going to do that.
 

smittie1984

New member
Oh Yeah

I forgot to mention the main reason I take payment after I complete the job. When I was younger I was very irresponsible. So I won't take payment even if I'm halfway through the job and the customer is leaving until the job is done.

It was kind of a way I was forcing responsibility on myself because I'm afraid that if they gave me the money upfront or even a little bit of it I would get sloppy with my work.
 

Henry Bockman

Maryland Pressure Washing
Hey Smittie, I can understand the following through until completion thing when you were younger, I was the same way but now things are different. I can't stand there waiting for a check, I need to move on to the next job and the one after that.
Find out the legal lingo in your state for collections and add it to your invoices along with late fees. That will usually solve any problems before they begin. If not, they most likely wouldn't have paid you in the first place. After a while you get a "feeling" for what customers are good and which one's arent. I tend to rely on my gut feeling when I'm estimating a job and if I think they are going to be difficult people or job I raise my price to make it worth my time. My time is to valuable to me and my family to do any less... All of us probably have the same opinion on the value of our time.
 

Grime Busters LLC

New member
Just received payment on a job that was just over 60 days past due. Received the original invoiced amount, but they are now refusing to pay the late fees.

Better than nothing, but I have learned that any further work I do for this company (a major motion picture producer) the terms will be COD.
 
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