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Old 02-12-2010, 12:27 PM  
Doorguy4ya
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Default Net 30 Paying Customers

to all of my fellow contractors, how do I deal with Net 30 customers? I really can't afford to pass up the calls, since most of work is commercial work and their charges are much higher than residential. however, I have so much trouble getting these guys to pay their bills. local Hotels, Movie Theatres and Restaurants are usually pretty good, but most of the time Malls have these Service companies from all of the place they use and they won't pay me unless I hound the crap out of them. Any Ideas?



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Old 02-12-2010, 04:17 PM  
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Originally Posted by Doorguy4ya View Post
I have so much trouble getting these guys to pay their bills.
Translate your hassle into dollars.

How many dollars would I have to pay you to be completely indifferent to using net 30 or some other?
The method chosen would be determined by the flip of a fair coin.

Think about it. You might already be close to the point of indifference if you even have to ask the question.

There is also a bias in which the sadness of losing $5 is equal to the happiness of finding $10, which may figure into this comparison.
http://en.wikipedia.org/wiki/Loss_aversion

List of cognitive biases - Wikipedia, the free encyclopedia


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Old 02-12-2010, 04:22 PM  
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Old 02-12-2010, 06:53 PM  
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I'm not a contractor, but...

If you're willing to lose the customer, you can put a "Builder's Lien" against their property. If they ever try to sell that property, you will get paid out of the selling price before the property changes hands. This is something you can do yourself without hiring a lawyer. Phone your local city hall or land titles office to find out the procedure.

Alternatively, find out who actually owns the mall. You can do that at your property tax office cuz the property tax bill will be sent to the registered owner of the property, not the management company. If you can talk to the owner(s) of the mall (or the head of the company that owns that mall) and just let him know the situation, he might not be aware that his management company is not paying contractors on time and in full, and might give them directions to shape up.

No owner wants his agent to give him a bad reputation cuz he knows that if he changes management companies, his mall will still have a bad rep amongst local contractors, and then it'll be his problem, not the old management company's. (That's why you often see "UNDER NEW MANAGEMENT" signs on businesses. They want people to know that the management has changed so that if they were fed up with the old management, that's no longer a factor.)

Heck, even if you tell the owners that their management company is so poor in paying it's bills, you're thinking of just putting a Builder's Lien against their property, that would certainly get the owner's attention. That's cuz in that case, his representative is representing him in such a bad way, it's giving him a bad reputation. And, he knows that if you take out that Builder's Lien, he's gonna have to pay for your work eventually, no way around that. Since you can include interest at the prevailing rate on a builder's loan, he knows there's no point in waiting and letting inflation erode the amount he owes. It's better to pay now and keep his record clear.

But, I expect that your problem customers are having a hard time paying you, and that's the source of the problem. If they had the money, they'd pay on time and in full.

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Old 02-12-2010, 09:44 PM  
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Here's what I've done and it works most of the time:
Your customer must be spending millions of dollars in a years time. Most mall owners and mall management companies do. If that's the case they understand and respect discounts. Discounts are a cheap price to pay to speed up your cash flow. In most cases slower paying big dollar customers are either playing a money market or just simply bogged down with too many $7hr clerks that don't give much of a damn.

Send your invoice for the full amount, but, have a rubber stamp made that says for example: 2-1/2% DISCOUNT NET 10 DAYS. Stamp it on the face of the invoice in a precarious fashion. See what happens! You may be surprised at how fast your invoices turn around for you.

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Old 02-14-2010, 01:28 PM  
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thats a good Idea, Bud I think I'll put that on my Invoices right away...

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Old 02-16-2010, 02:08 PM  
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That is a good idea Bud.

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Old 02-16-2010, 03:46 PM  
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Years ago I had annual contracts with the Army Corps of Engineers in Texas. I shared repair and maintenance duties with two other contractors at three major lakes in North Texas.

Damn the government was super slow pay back then. It wasn't unusual to wait sixty days or more for my money. It got to the point it was almost breaking me and they weren't at all cooperative when I would call them crying for payment. Then one day I got hold of a nice lady that understood my concerns. She told me that I wasn't being paid right away because I wasn't discounting my invoices. WHAT HELL? I have to wait for months AND discount my invoices too. What a bunch of crap!!!!! I had a discount amount of 10 or 15 percent rolling around in my head when she suggested I should discount my invoices. No friggin way!

She told me to calm down and listen - so I did.

Seems that congress had passed the "Prompt Payment Bill" because they knew they had issues with getting people paid in a reasonable amount of time. To participate in the Prompt Payment Program one had only to discount their invoices. Her suggested amount was somewhere between 1/2 and 2-1/2 percent. HOLY **** IS THAT ALL?????

From that day forward I authorized them to take a discount over the phone and I had my first check in two days. From there on in I routinely discounted every invoice from 1-1/2 to 2-1/2 percent and always had my money within ten days without fail. Like she told me... When someone is spending millions and billions of dollars those discounts start to add up quickly.

I learned a valuable lesson from that lady that day and over the years I have discounted large invoices never more than 2-1/2% and I have (almost) always been paid promptly. It takes a big-spender company to appreciate the discounts tho. Mall owners and mall management companies are usually big spenders.

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Old 02-16-2010, 06:38 PM  
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three major lakes in North Texas.
Seems like the Army does a lot of work with lakes in TX
http://www.town-mall.net/community/texas_lakes.html


BTW, what comes out of a Holy Cow?
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Old 02-17-2010, 09:24 AM  
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Quote:
Originally Posted by Bud Cline View Post
Years ago I had annual contracts with the Army Corps of Engineers in Texas. I shared repair and maintenance duties with two other contractors at three major lakes in North Texas.

Damn the government was super slow pay back then. It wasn't unusual to wait sixty days or more for my money. It got to the point it was almost breaking me and they weren't at all cooperative when I would call them crying for payment. Then one day I got hold of a nice lady that understood my concerns. She told me that I wasn't being paid right away because I wasn't discounting my invoices. WHAT HELL? I have to wait for months AND discount my invoices too. What a bunch of crap!!!!! I had a discount amount of 10 or 15 percent rolling around in my head when she suggested I should discount my invoices. No friggin way!

She told me to calm down and listen - so I did.

Seems that congress had passed the "Prompt Payment Bill" because they knew they had issues with getting people paid in a reasonable amount of time. To participate in the Prompt Payment Program one had only to discount their invoices. Her suggested amount was somewhere between 1/2 and 2-1/2 percent. HOLY **** IS THAT ALL?????

From that day forward I authorized them to take a discount over the phone and I had my first check in two days. From there on in I routinely discounted every invoice from 1-1/2 to 2-1/2 percent and always had my money within ten days without fail. Like she told me... When someone is spending millions and billions of dollars those discounts start to add up quickly.

I learned a valuable lesson from that lady that day and over the years I have discounted large invoices never more than 2-1/2% and I have (almost) always been paid promptly. It takes a big-spender company to appreciate the discounts tho. Mall owners and mall management companies are usually big spenders.
If you know your going to discount do you calculate that into your bid?


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