how to handle?

[treeman82]

Back in May one of the companies I do business with referred me to a construction company that they do business with. I was tasked with removing 4 trees from a town owned property plus pruning one other. There were several different plans for removal, which at one point had dwindled down to removing 2 trees and pruning 2 others, however one of the ones that would have been left was going to remain with only 30% folliage, a compromised root system, and a lean over a new building... I brought up my concern about leaving that tree, and was given the green light to remove it. My contract with the construction company said to remove the 4 plus prune the 1, cut stumps ALAP and that's it... payment due upon completion. The day before I was to do the job I got an e-mail from the construction company saying I did not have to remove the tree that would remain over the building... that I could just prune it. However my gut told me to get rid of it due to future liability, plus that's what we agreed on. While we were doing the job in late June, the project manager? asked if I could remove another small tree that was in his way, so we did it and I did not bill the construction company for it... told them it was a courtesy or whatever. Well it's now the middle of August and I haven't been paid. I've made repeated calls to the construction company to find out what is holding up the money, and I keep getting the run around. I also made a few site visits, and the project manager says I need to grind out one of the stumps before they will pay me. I checked with the office, and they did not say anything about the stump, and let's face it... it's not in my contract. When speaking with the office I told them that I would be happy to grind the stump, but I first need to be paid for the work that was already done... they told me that I would have a check in a week. That was last Friday... my plan is that if I do not have a check in my hands by Monday I am going to go after their bond. Does this seem like a reasonable plan of action that I have taken?

 

[Zale]

Welcome to the construction world. Talk to accounts payable and ask them when they will have the check written. Pick it up in person. Unfortunately, this is SOP for construction companies. If you have a attorney friend, look into placing a lien against the property. That usually will get the attention of the Project Manager.

 

[jefflovstrom]

I agree, and don't stress yourself out.
Jeff

 

[Tree Pig]

Even worse then dealing with a construction company you are dealing, all be it second hand, with a municipality. They can often take 90 days or more to pay a bill. Construction companies, especially large ones can be almost as bad.

 

[Rftreeman]

Send Chuck Norris to collect your money....

 

[imagineero]

Agree with the above comments. You are unlikely to get (or want!) future work from this client, so don't give them leeway. Assuming that you have a written paper contract signed by them, and you have fulfilled the work detailed and have a valid work order from them which matches your invoice in the specifics of the work and the amount, then contact their accounts payable and be insistent (but not angry) on payment. Squeaky wheel gets the grease. Be polite, but tell them that you will have to instigate a legal claim within the next 3 days if a cheque is not received. I hope your invoice detailed your terms and that those terms have been exceeded well and truly.

I don't do much commercial work for the above reasons. Everybody seems so keen to jump in to the commercial market because the dollar values look high, but the margins are very low, and 90 days is standard operating procedure, even if you specifiy 7 day terms. Some guys drag it right out to 6 to 9 months. The bigger the company, the worse they abuse it. I once had BHP drag out an account to a year. Yeah, they never got work done by me again, but those big name boys have no shortage of schmucks queueing up to offer them credit. They don't need an overdraft and the accompanying interest, they just use every contractor they find as an unsecured creditor, for as long as they feel like.

If you don't get satisfaction in the 3 days, take maximum action. Consider it a lesson learned.

Shaun

 

[dbl612]

Agree with the above comments. You are unlikely to get (or want!) future work from this client, so don't give them leeway. Assuming that you have a written paper contract signed by them, and you have fulfilled the work detailed and have a valid work order from them which matches your invoice in the specifics of the work and the amount, then contact their accounts payable and be insistent (but not angry) on payment. Squeaky wheel gets the grease. Be polite, but tell them that you will have to instigate a legal claim within the next 3 days if a cheque is not received. I hope your invoice detailed your terms and that those terms have been exceeded well and truly.

I don't do much commercial work for the above reasons. Everybody seems so keen to jump in to the commercial market because the dollar values look high, but the margins are very low, and 90 days is standard operating procedure, even if you specifiy 7 day terms. Some guys drag it right out to 6 to 9 months. The bigger the company, the worse they abuse it. I once had BHP drag out an account to a year. Yeah, they never got work done by me again, but those big name boys have no shortage of schmucks queueing up to offer them credit. They don't need an overdraft and the accompanying interest, they just use every contractor they find as an unsecured creditor, for as long as they feel like.

If you don't get satisfaction in the 3 days, take maximum action. Consider it a lesson learned.

Shaun

as has been stated already here, commercial and industrial accounts take longer to pay. if you want to get into this arena, price the job with the delay in payment factored in. the banks charge you for the use of their money, you should remember this when you price out a potentially slow-pay job. you can always include in your pricing a discount for COD or full payment in 10 days etc. most beancounters at large concerns avail themselves of discounts when they are stated in the quote. no need to antagonize the customer just be informed and act accordingly. you never know what company executive is asked for a referral for some private work. why would he refer a company that broke his balls previously.

 

[Eq Broker]

In Georgia you're required to send a demand letter for payment that I send certified mail. If the person doesn't respond to your demands, we then visit the magistrates office and claim theft of services.

Hope this helps.

Dave

 

[Blakesmaster]

as has been stated already here, commercial and industrial accounts take longer to pay. if you want to get into this arena, price the job with the delay in payment factored in. the banks charge you for the use of their money, you should remember this when you price out a potentially slow-pay job. you can always include in your pricing a discount for COD or full payment in 10 days etc. most beancounters at large concerns avail themselves of discounts when they are stated in the quote. no need to antagonize the customer just be informed and act accordingly. you never know what company executive is asked for a referral for some private work. why would he refer a company that broke his balls previously.

As long as I KNOW the money's coming I kinda like slow payers. By the time I get the check the cost of the job has already been absorbed in the day to day operations so it's like a nice little bonus. Been over a month and a half that I've been waiting on payment from a job I did at the local state college. Its gonna be a sweet pay day when that #### finally smacks my account.

 

[jefflovstrom]

Agree with the above comments. You are unlikely to get (or want!) future work from this client, so don't give them leeway. Assuming that you have a written paper contract signed by them, and you have fulfilled the work detailed and have a valid work order from them which matches your invoice in the specifics of the work and the amount, then contact their accounts payable and be insistent (but not angry) on payment. Squeaky wheel gets the grease. Be polite, but tell them that you will have to instigate a legal claim within the next 3 days if a cheque is not received. I hope your invoice detailed your terms and that those terms have been exceeded well and truly.

I don't do much commercial work for the above reasons. Everybody seems so keen to jump in to the commercial market because the dollar values look high, but the margins are very low, and 90 days is standard operating procedure, even if you specifiy 7 day terms. Some guys drag it right out to 6 to 9 months. The bigger the company, the worse they abuse it. I once had BHP drag out an account to a year. Yeah, they never got work done by me again, but those big name boys have no shortage of schmucks queueing up to offer them credit. They don't need an overdraft and the accompanying interest, they just use every contractor they find as an unsecured creditor, for as long as they feel like.

If you don't get satisfaction in the 3 days, take maximum action. Consider it a lesson learned.

Shaun

We don't do residential. 90 day's is not unheard of in commercial. If you can't support your business cost's without relying on a quick payment, that would seem risky. Oh well, it's called working capital.
Jeff

 

[treeman82]

We don't do residential. 90 day's is not unheard of in commercial. If you can't support your business cost's without relying on a quick payment, that would seem risky. Oh well, it's called working capital.
Jeff

I like residential work and try to stay the heck away from commercial / municipal. Right now things are slow, and money has been flying out to pay for various things... so I want what I am owed. I had mentioned to the construction company that the only reason why I was willing to work with them was because I wanted to be in the good graces of our mutual contact.

 

[jefflovstrom]

I like residential work and try to stay the heck away from commercial / municipal. Right now things are slow, and money has been flying out to pay for various things... so I want what I am owed. I had mentioned to the construction company that the only reason why I was willing to work with them was because I wanted to be in the good graces of our mutual contact.

I feel like going out on a limb,
Thing's are slow in the residential unless they live in an HOA.
Tree's are a liability
HO's dont care,
Commercial property's do. Got it?
Jeff

 

[treeclimber101]

​

Yea I kinda like some money to come in slow , it gives me a feeling like I have a little savings and also if I didn't wrap up too much time into it I won't ##### about it at all , it is sweet to get a few grand free and clear after you've already paid for what it cost but I feel your frustration I hate the run around #### it's just rude

 

[imagineero]

We don't do residential. 90 day's is not unheard of in commercial. If you can't support your business cost's without relying on a quick payment, that would seem risky. Oh well, it's called working capital.
Jeff

Offering large amounts of unsecured credit is another type of risk, especially in tough economic times. Every business has their own mix of customers, for myself I do a little commercial work but mostly residential. I have some buddies who do commercial exclusively. Most of them have large overdrafts which they use as WC. If you are consistently getting dragged out to 90 days plus on all your accounts and run a couple trucks and chippers then you're probably looking at somewhere in the $100k~$200k range for your running costs. You could your your own cash but then you have to factor in the opportunity cost of doing so. While the interest is tax deductable, the bottom line is that it affects your bottom line. You can factor all that into your quotes, and also be prepared for and factor in a certain amount for bad debt.... but all that is going to jack your prices up and make you less competitive. Or you can keep your prices down and make less profit.....

For myself, I'm pretty small time. I keep working capital of between $10k~$15k in my business account which gives me some breathing space and a reasonable amount of get of of jail free when things break. So far I've never had bad debt. Residential is fairly secure in terms of getting paid.

Shaun

 

[treeclimber101]

And not to tell ya how run your business but when you start slapping mechanics liens on guys they will start talking about ya the word gets around quick and that may black ball for other jobs just make sure it's worth it that's all

 

[treeman82]

And not to tell ya how run your business but when you start slapping mechanics liens on guys they will start talking about ya the word gets around quick and that may black ball for other jobs just make sure it's worth it that's all

Like some of my clients have said to me in the past... "you did the work, you deserve to be paid."

 

[treeclimber101]

Like some of my clients have said to me in the past... "you did the work, you deserve to be paid."

Absolutely it's all about how you go about getting it

 

[coolbrze]

We do 90% residential & 10% commercial, no municipality work. Not sure why some of you like the "slow payers" b/c that makes no sense to me. I'd rather get paid ASAP. Most commercial jobs we do pay w/in 90 days. We had one HOA property management company take 110 days last year and that was a record breaker for us. They gave us the run-around about some changes in their accounting dept. yadayadayada, I don't care what the excuse it. When bidding commercial jobs, we bid accordingly & don't plan on receiving payment soon after completion.

Back to your question, if you've completed the project to contract specs, I wouldn't grind the stump no charge unless it's a quick job and you're close-by. Someone also mentioned other companies getting word of you placing liens & harming your rep, funny, a peer of mine & I were discussing the same thing a few months ago.

 

[jefflovstrom]

Not sure why some of you like the "slow payers" b/c that makes no sense to me.

Well, if you have only eaten hamburger, how do you know you won't like a steak?
Jeff :msp_thumbup:

 

[treeclimber101]

We do 90% residential & 10% commercial, no municipality work. Not sure why some of you like the "slow payers" b/c that makes no sense to me. I'd rather get paid ASAP. Most commercial jobs we do pay w/in 90 days. We had one HOA property management company take 110 days last year and that was a record breaker for us. They gave us the run-around about some changes in their accounting dept. yadayadayada, I don't care what the excuse it. When bidding commercial jobs, we bid accordingly & don't plan on receiving payment soon after completion.

Back to your question, if you've completed the project to contract specs, I wouldn't grind the stump no charge unless it's a quick job and you're close-by. Someone also mentioned other companies getting word of you placing liens & harming your rep, funny, a peer of mine & I were discussing the same thing a few months ago.

Because there are times when I don't need the money but if I had it I would squander it on something dumb , its almost like xmas morning when you go get the mail one day and there's a surprise in it a check that you expected 5 months ago I jus take that check and save it