Question for self-employed or business people....

[CAJUNLAWYER]

Went to a sewing place to get a new boot for my bimini. Asked for a price and he responded-"Do you need a receipt?" I said no-he quoted a price I accepted and he gave me the finished product when I paid. If I wanted a receipt-price would have been higher.
This is a learning moment for you. Hardest thing for a person is to set a value on their services and stick with it. Insist on a payment schedule acceptable to you and don't negotiate. If the buyer gets mad, you don't want him for a client. Period.
Tough but necessary lesson for all sole practitioners to learn

 

[biku324]

^^^^^That.

And don't fixate on a single transaxtion - it is the relationship that matters. I had one company that was $14,000 and change ahead of me in spring, 2014; once they got their side unscrewed, in about 60-90 days, I never had a problem with them again. I also got additional business because they appreciated my patience/good humor.

 

[JJEH]

I figure 30 days is standard business practice.

Unfortunately, for bigger companies this is common practice.

Henceforth, establish your terms before doing the job.
If you want to be paid at pickup, make sure they know that and have a good specific invoice ready.

If you do offer terms, spell them out on the invoice-
"Net 10 days" or "Net 30 days" or actually put the due date
with something like "add 10% for late payment".

↑↑↑↑↑ This ↑↑↑↑↑

If you have a website, put it there, or the newspaper. In addition, print it and put it in your workshop for everyone to see. Also, mention it on the phone with every new customer.

 

[JimBianchi]

First, email client a contract with payment requirement prior to the work starting. Require an affirmative reply before work is started.

Payment upon delivery or take the work back, if possible.

Small claims court filing fee is usually cheap. Once served, advertise his non-payment as wide and loud as possible.

I ran a business for 25 years and got stiffed near the end by my longest and largest client, who I considered a friend.

When it comes to money, some people just become asshols.

 

[ACORN]

I knew a guy that was in charge of his companies "Accounts Payable". A local petroleum products distributor/convenience store/family restaurant business. His motto was pay them when they squealed

 

[Telecaster]

I've found that the more money a client has, the slower they are to pay.

I guess that's why they have more money.

 

[len917]

You can also offer a prompt-pay discount. Our terms were "2% 10 days, balance 30" meaning that if it was paid within 10 days they got a 2% discount. Most took the 2%. If they don't, they might have a cash-flow problem.

I'm a little wary of the "billing cycle" he mentioned. That's often just an excuse for delay. Another indicator of a cash-flow problem. We used to cut checks weekly, so two weeks was the longest you'd go with us on a C.O.D. We took every prompt-pay discount we could.

But I also understand his point of view. It depends on how big his operation is. Sometimes it's a hassle getting a check cut for a C.O.D.. But he might just be waiting to get paid before he pays you. I don't know about you, but I ain't no bank. There's a surprising number of cash-poor companies that are riding the "float".

Companies I dealt with that needed to pay me right away used a credit card. Now most companies give credit cards to dept managers who need to buy smaller purchases.

 

[len917]

You can also offer a prompt-pay discount. Our terms were "2% 10 days, balance 30" meaning that if it was paid within 10 days they got a 2% discount. Most took the 2%. If they don't, they might have a cash-flow problem.

I'm a little wary of the "billing cycle" he mentioned. That's often just an excuse for delay. Another indicator of a cash-flow problem. We used to cut checks weekly, so two weeks was the longest you'd go with us on a C.O.D. We took every prompt-pay discount we could.

But I also understand his point of view. It depends on how big his operation is. Sometimes it's a hassle getting a check cut for a C.O.D.. But he might just be waiting to get paid before he pays you. I don't know about you, but I ain't no bank. There's a surprising number of cash-poor companies that are riding the "float".

I gave 2% -15 days terms to certain large and loyal customers that had their payment terms a net 60 days. They did take the 2% in 15 days. As to giving % for early payment shows a cash flow problem, I argue that is not correct. Some companies offer this as an incentive to pay early so that they can pay their bills early and take advantage of a discount OR better credit rating with their supplier.

 

[Golddollar]

I gave 2% -15 days terms to certain large and loyal customers that had their payment terms a net 60 days. They did take the 2% in 15 days. As to giving % for early payment shows a cash flow problem, I argue that is not correct. Some companies offer this as an incentive to pay early so that they can pay their bills early and take advantage of a discount OR better credit rating with their supplier.

The County, Borough and School District all give me a 2% discount for paying my taxes early. Do I take it? Every chance I can.

The discount for early payment of my taxes has actually given me the incentive to prorate all of my non-monthly expenses on a monthly basis and make those payments into a dedicated account so that when each of those items come due the money is there to pay them, particulary within the discount period for taxes.

 

[coltle6920]

G-Mac...
Terms for payment/credit should be laid out in advance for your protection. Shouldn't matter if it's a onetime customer or someone looking for a longterm relationship.

The person doing the work sets the terms for payment...not the customer.

 

[pawngal]

I've found that the more money a client has, the slower they are to pay.

I guess that's why they have more money.

I have had many local contractors tell me the same thing.

 

[GypsmJim]

I knew a guy that was in charge of his companies "Accounts Payable". A local petroleum products distributor/convenience store/family restaurant business. His motto was pay them when they squealed

Eons ago I worked for a Fortune 500 company that often had problems getting payments. It took legal recourse at times, which cost the company money. Someone determined that it cost $74 for each late payment. Unfortunately, loose lips and that got out to the customers.

Several companies would shortchange their bill by $74. Obviously, no one would go after them because it wasn't cost effective.

Finally, we cut them off completely. Since we were their only supplier and now they had no product, several were on the verge of going out of business.

When they pleaded for help, we put them back on the supply list. With a 10% surcharge and a price increase. Funny, that ended the problem.

 

[YeshuaIsa53]

We used to own a corporation that sold and/or installed products. We learned two or more lessons to say the least.

We went to court with one man's small business who didn't show, so they gave us what we needed to place a lien on his house. He was not incorporated. We warned him about what he wanted us to order for him. All was payed.

Only a month or two goes by, and he showed up again wanting what we had asked him to buy. He was told the special order would not be refunded. We stupidly let our guard down to help him try to please his customer. He later refused to pay for it. We had an invoice with terms and a signature for the courts. It drew interest every year. Lost the customer and the product. The lien disappeared through his local legal system that were most likely friends in a small town. Had it been local, it would not have disappeared.

Earlier in the corp, we installed products for a friend of my Dad's. They were in clubs together. We did not get a signature.

Many years later, it was still in our invoices. When a new man took over the office, he found it. When called, the man simply said "Show me an invoice with my name on it." We found he had a habit of taking advantage of people. Yes, he was rich.

We went to a local judge. He answered every single question with a phrase before each answer. He would answer beginning with "The law says".
He told us, "What we have here is good faith gone bad".

Of course we continued with signatures from government agencies. Non-governmental folk had to hence have a 50% deposit down and the balance due upon completion. If they started with problems, we knew where we were heading. The judge told us we could go on their property and take our materials, IF we had their permission. We found talking with people like that long enough could lead to our asking for permission to do so.

Most of those people, if talked to with skill and a goal in mind, would believe we would not do that and give permission. The materials would be removed same day. They may have cost us labor, but they would not have anything to show for it.

Competition would be warned of the person, as we were all friends that had bought from us here and there. One man called and said he had an air tight contract and was going to do his job. He was warned again. After not having placed an address location on his air tight contract, the man let him install. It was a large job. The man, when asked for payment, told my friend he had installed on the wrong property, even though he had shown them where placement was. He called us and said he should have listened.

Some work is best left for others.

 

[pantannojack]

I USED to do door and window installs, trim, and repairs. Now I only work for people I know or can see reliable references for. HO's like to boast about the lower class working man who is so easy to rip off. Well good luck finding a blue collar professional who will trust "you" ever again. I must see the CASH first, then i may start the work.