# How do you handle non-paying commercial accounts?



## TonawandaNY (Aug 3, 2009)

A 3 weeks or so I posted I had my first commercial account. I knew when I had to tell them I was withdrawing the bid because they failed to return the contract I was probably getting myself into trouble!

However, the guy called and he apologized for the mis-communication and sent the contracts back signed. However, now they are 19 days late on paying the first payment!

I am starting to get frustrated and I am about to pull the plug all together. How do you get people to pay who dont want to pay on time?


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## dchr (May 9, 2009)

First double check your contract for the payment terms. A couple of my commercial customers prefer to be invoiced monthly for all services (they are on a per push basis-I only do this with customers I trust)Try a phone call or two if you already haven't. Stop in personally to see your contact.If no response-no more service,send them a certified letter that you are withdrawing your services/opting out of your contractual obligations. Then if it is a good size sum of money you are owed-small claims court or a collection agency are in line.Hope everything works out for you.


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## TonawandaNY (Aug 3, 2009)

I called and talked to him on the 7th. In my contract it states anything not recieved after the 10th is subject to a 30.00 late fee. I like to give folks the benefit of the doubt and try to call if I have not gotten paid or atleast a phone call with an explanation prior to the 10th. I understand sometimes people forget

On the 7th he said there was another miscommunication and he needed a monthly invoice. I asked him when I sent the contracts if he needed an invoice and he never responded. 

I sent him an invoice on the 7th. He should have had it by the 8th or 9th at the latest as it is just the next town over.

Since then, I have gotten no phone calls, no letters and most important, no checks. They are a seasonal contract. I already gave him the benefit of paying at the end of the month because it was a friend of a friend situation that refered me.

I just left him a vm to call me and let me know what the deal is.

Steve


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## 2COR517 (Oct 23, 2008)

Are don't know what your service level agreement is with him, but I would wait to the very end to plow him. Are you getting this storm tonight? That will usually get them to call you.


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## mycirus (Dec 6, 2008)

You invoiced him on the 7th and want him to pay on the 10th? 3 days isnt that much time.


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## Two Seasons (Dec 6, 2009)

Our invoices are due on receipt. What do you want to bet when they do pay you won't see the late fee?


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## creativedesigns (Sep 24, 2007)

TonawandaNY;915337 said:


> A 3 weeks or so I posted I had my first commercial account. I knew when I had to tell them I was withdrawing the bid because they failed to return the contract I was probably getting myself into trouble!
> 
> However, the guy called and he apologized for the mis-communication and sent the contracts back signed. However, now they are 19 days late on paying the first payment!
> 
> I am starting to get frustrated and I am about to pull the plug all together. How do you get people to pay who dont want to pay on time?


Welcome to the Commercial world! They legally have 30 days to pay an invoice. We sent our invoices out at the end of each month. It takes around 20 days to pay, which is good! Theres always a hold back for the last month in case theres any property damage to repair. 


Two Seasons;915405 said:


> Our invoices are due on receipt. What do you want to bet when they do pay you won't see the late fee?


They will never pay silly late fees! IMO


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## grandview (Oct 9, 2005)

Most are 30 days. Some companies only cut checks on the first and 15th of the month.


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## suzuki0702 (Apr 6, 2008)

man my resis and commercials are 30 days. my big commerical is 45!!! i get em in 20 tho! i wouldnt work for these duds if they dont pay on time habitually...call it a probabtion after the first time, then end service


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## White Gardens (Oct 29, 2008)

I've seen and heard of some companies going up to 90 days before paying.

Expecting a commercial account to pay within 10 days is crazy. Accountants for the companies do billing on a schedule, and I doubt they are going to make exceptions for the Plow Guy.


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## RepoMan207 (Oct 7, 2008)

creativedesigns;915445 said:


> Welcome to the Commercial world! They legally have 30 days to pay an invoice.QUOTE]
> 
> Were the hell did you get that from?
> 
> ...


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## TonawandaNY (Aug 3, 2009)

mycirus;915374 said:


> You invoiced him on the 7th and want him to pay on the 10th? 3 days isnt that much time.


A friend of mine trying to help me out gave the guy my number who in turn called for a quote. I sent him the quote in October. He called the 1st week of November and said I was awarded the contract. I then sent him a contract with a payment schedule. With everyone of my accounts with exception of this guy they either pay up front/in halfs/ or monthly at the beginning of the month. I never got the contrct back so the week before thanksgiving I dropped a letter offer advising that I was withdrawing my bid. He called me with the hour all confused and apologized for the misunderstanding. I told him at that point I could not take on his lot. He seemed realy down about. I am a man of my word and I hate breaking my word even when other people are not the same way towards me. I unded up taking him on away and he said he would like to pay me at the end of the month. My friend said he was a stand up guy so I made an exception.

When I sent him the quote and the billing schedule I told him to send me in writing if he wanted printed invoices. He sent the contract back and there was no writing about printed invoices so I assumed because he had the billing schedule that he was going to send me a check. When I did not get it by the 7th, being the nice guy that I am and trying to save him the late fee, I called him. He said there was another misunderstanding and he needed printed invoices. I mailed the invoice on the 7th. He said he does checks on Wednesday and I should have it by Friday. That was Friday December 11th days ago.

I dont want to over react, yet I need to make sure I get paid. i have already plowed the lot twice and done the sidewalks.

I hate dealing with the finacials! Which is probably why from a stress persepctive I am better working for others than myself.


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## TonawandaNY (Aug 3, 2009)

PS.. This is also my only commercial account, and also the only account that I invoice. On my residential accounts I either call my clients or most of them call me ahead of time when their payments are due.


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## grandview (Oct 9, 2005)

To avoid confusion ,you should always send out an invoice.


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## ff610 (Jan 9, 2009)

I have some commercial accounts that are slow to pay, but they always pay. I don't like extending the payment time, but they are great paying accounts other than being a little slow. I have been doing work for this company that manages these accounts for about ten years and have simply gotten used to it. Sometimes its 60 days to get paid, but I have enough other good accounts that cover me during this period. I typically don't allow this to happen with with the other accounts or it would obviously put me in a financial bind. If the management company gave me any grief I would just drop them, but they just run their books a little different. It boils down to what you can financially handle and what your willing to do for the work. Every circumstance could be different. I guess I look at it as offering a line of credit like many suppliers in the industry do.


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## RepoMan207 (Oct 7, 2008)

I agree with GV, I invoice everyone that isn't on seasonal.

Seasonals are pay up front, I give them a contract with pricing included as my bid. That way they can see my terms and the $$ up front. Although I had a few PITA's, I started having an issue with Seasonals turning in there contracts at the last minute because I state right in the contract...."Payment is due in full at the time of signing". I'll have to change something on that next year to avoid the nonsense. But it other then that it works well.


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## StormRanger (Oct 15, 2009)

I have about 20% pay within 5 days of getting the invoice, the rest stretch all the way till the end of the month. I think it states in my contract 'by the next billing cycle'


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## TonawandaNY (Aug 3, 2009)

I have his cell phone number and left him message yesterday evening when I got home and there was not a check in the mailbox. I will call him tomorrow and try to get a face to face meeting and put it clear as day so there is nore confusion...

I am not willing to wait until June to get paid for snow plowing done in March!


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## THEGOLDPRO (Jun 18, 2006)

have you tried waiting in the backseat of the guys car???


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## TonawandaNY (Aug 3, 2009)

Situation resolved. I am glad I did not over react. They "forgot to mail it". I have been reassurred it is in the mail.


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## speedy (Oct 30, 2004)

Famous last words.....


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## IHI (Nov 22, 2003)

speedy;918883 said:


> Famous last words.....


:laughing: You've heard that line too huh?:realmad:

I tell ya, the more time goes on in my construction business the more frustrated i get with mofo's who dont pay within a 30day period of completion, getting paid has been THE biggest headache i deal with...and when i do get paid the day we're done, i'm honestly awe struck.

commercial stuff, i've personally never been stiffed (knock on wood) but have done jobs for places that were on a 90day rotation, and after a few years i looked at the situation as a whole and figured out, the money i put out in labor, fuel, product was while waiting for a 3 month payment cycle was enough for me to completely DROP the account all together, SAVE that money and sit on my azz instead and keep my money. So depending on how it all plays out, just be sure to look back once in awhile and assess your situation. In 5 years i've dropped 75% of my accounts and only took a 25% hit on gross...

It can be frustrating, most of us have been there, but after awhile you just realize your stuck to their pay terms, not yours. As for late fees...good luck, you wont see them.:realmad: ALSO something to keep in mind, we have a local car dealership and the ***** owns business all over the country as well, he is notorious for stiffing contractors and then using the high power lawyers to drag out any court sessions until the contractors cry uncle and just flat give up. They built a new honda dealership 6 yrs ago, the whole time he'd just give little divvies of money here and there to pacify. Once it was all done, and operating he told all the contractors to pound sand, naturally these were larger companies involved with their own lawyers and it went to court, the dealer ***** offered $0.50 on the dollar, take it or leave it. a few of the contractors took it just to recoup a bit of the money...the rest still have'nt seen a penny and nothing has been mandated yet by the courts...so the multi millionare car dealer is just wearing them down with his money and paperwork.

I remember a freind of mine that got the lawncare bid for the place did'nt get a check for 3 months, stopped in and talked with the owner himself and asked if he was'nt happy with the service, or if he was'nt doing a good enough job. the guy sat back in his chair and said, your doing an excellent job, probably the best lawncare any of my places ever had; I'm just not going to pay you.  So naturally my buddy got pizzed and threatened court/lawyers and the guy just smiled and said i hope you do, i'll force you into only being able to put your family in a cardboard box for a home and you still will never see a penny from me.

So yeah, kinda gotta watch your back with certain places.


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## big acres (Nov 8, 2007)

TonawandaNY;918874 said:


> Situation resolved. I am glad I did not over react. They "forgot to mail it". I have been reassurred it is in the mail.


Maybe I missed what kind of biz this is? Chances are that the are just getting by themselves. It is good that you did not over react, for that would show naivitae, but I do hope you are joking when you say that the situation is resolved because you were told ":the check is in the mail".


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## Bajak (Nov 12, 2008)

I hope the U.S. postal service is faster than Canada Post. Sometimes it takes 10-12 weeks for checks to arrive.


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## elite1msmith (Sep 10, 2007)

sorry, i didnt take the time to read the whole thread, its late, im tired

no offense, and trust me i know late payments can mess up your world at times... but i highly think you are over reacting. its the middle/end of Dec. when its 60 days late then get pissed. iv heard every excuse in the book. bill us at the end of the month, then we pay 30 days later... bill us, we enter the invoice and 30 days later, expect a check on the next check batch (1sth 15th) either way its 60 days. Id say if you are hurting for the cash that bad, your in the wrong business, or things arnt looking so good for you. i dont how much snow you have gotten this year, but i think most of the country has had a light winter so fare compared to other years


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## grandview (Oct 9, 2005)

Bajak;919626 said:


> I hope the U.S. postal service is faster than Canada Post. Sometimes it takes 10-12 weeks for checks to arrive.


So that's why my coat is taking so long from JD!


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## TonawandaNY (Aug 3, 2009)

1) He offered for me to pick up the check. His office is about 18miles or so from me. He apologized for the mistake and said he would get it out in the mail today. So, I told him to mail it. I had to go help a family member yesterday, which kind of blocked my ability to go pick it up. I figured if he mailed it yesterday, then there was no reason to go get it today as I may have it today.

2) I am not in anyway hurting for the cash. 

3) It is not resolved until I get a check in my hand. That part was my sarcasm

I know when my bills are due I don't pay them when I am ready, I pay them before the due date. Due to the fact this is my first year and most of my accounts are residential who pay ahead, I guess I assumed other people paid their bills on time.

Either way the guy said he sorry, by mail it should only take a day or two to get to me. So if he mailed it yesterday, then I will either have it today or tomorrow. I want to give him the benefit of the doubt.

I guess my question was more directed at, "is it normal for commercial accounts to pay late"


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## IHI (Nov 22, 2003)

TonawandaNY;919776 said:


> I know when my bills are due I don't pay them when I am ready, I pay them before the due date. Due to the fact this is my first year and most of my accounts are residential who pay ahead, I guess I assumed other people paid their bills on time.
> 
> Either way the guy said he sorry, by mail it should only take a day or two to get to me. So if he mailed it yesterday, then I will either have it today or tomorrow. I want to give him the benefit of the doubt.
> 
> I guess my question was more directed at, "is it normal for commercial accounts to pay late"


Commercial is in no way shape or form going to be like me or you in paying the monthly bills coming in, MOST have a set pay schedule of twice a month (15th/29th), other's are set up pending the vendor that feeds them. We did some work for 2 Hardee's in town, they told me i will not see a thing for 3 months. Same with one of the plow accounts i had, THEIR main vendor/supplier (john deere) is set up on a 90day billing cycle, so this place i worked for was set up on the same schedule as well.

I've never been stiffed by anybody other than residential, but with commercial, sometimes you just have to wait...if this is your first year it will be a tough pill to swallow, but after awhile you just become used to it and dont get excited anymore since it's just business as usual.


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## creativedesigns (Sep 24, 2007)

RepoMan207;916039 said:


> creativedesigns;915445 said:
> 
> 
> > Welcome to the Commercial world! They legally have 30 days to pay an invoice.QUOTE]
> ...


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## TonawandaNY (Aug 3, 2009)

thanks for all the input everyone.

As I think I stated this a friend of friend situation and I am looking to burn any bridges. I have enough work without this account. However, the extra cash is always nice to have.

I was just looking to see how some of you folks that have been doing this stuff for awhile felt so I dont end up over reacting. I think and I hope we are on the same page with this account now. The guy seems like a nice guy. he also seems like he has alot on his plate. So it is possible that he just forgot.


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## elite1msmith (Sep 10, 2007)

TonawandaNY;919776 said:


> 1) He offered for me to pick up the check. His office is about 18miles or so from me. He apologized for the mistake and said he would get it out in the mail today. So, I told him to mail it. I had to go help a family member yesterday, which kind of blocked my ability to go pick it up. I figured if he mailed it yesterday, then there was no reason to go get it today as I may have it today.
> 
> 2) I am not in anyway hurting for the cash.
> 
> ...


glade to hear its working itself out.

remember these valuble business lessons.

1. NEVER assume anything , it makes an a$$ out of you and me

2. "other people pay their bills on time" HAHA - good one

3. Normal for a commercial to pay late. Some are alot better than others. I have learned its all apart of the game. they run their compaines different than how you or i run ours. I have a restrurant, the owner is the only person that cuts checks, Hes only i 1 day per month. If you got the invoice on his desk before hes in, then your getting a check. if not, you wait until the next time he is there. Some places have staffs set up do to nothing but pay outs...some its just a mom and pop and they pay it when they have good cash flow, some its just when they get a chance to do it, simply because they are busy. others have a set day of the month or week to expect payment, you will learn how each one does there business and that will give you an idea of when to expect it. Consider this, alot of people, including myself can get so busy i dont even have time to send out the invoices for weeks. If im that busy... other business owners or manager have things to do as well.


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## TonawandaNY (Aug 3, 2009)

TonawandaNY;919973 said:


> thanks for all the input everyone.
> 
> As I think I stated this a friend of friend situation and I am looking to burn any bridges. I have enough work without this account.


whoops.. was suppose to say *NOT*

looking to burn bridges.


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## buckwheat_la (Oct 11, 2009)

IHI;918932 said:


> :laughing: You've heard that line too huh?:realmad:
> 
> I tell ya, the more time goes on in my construction business the more frustrated i get with mofo's who dont pay within a 30day period of completion, getting paid has been THE biggest headache i deal with...and when i do get paid the day we're done, i'm honestly awe struck.
> 
> ...


When i was first starting out, i had a guy do this EXACT thing to me, looked me straight in the face, gave me a check for HALF of what was agreed, and said he had good lawyers and that i could take the check or get NOTHING!!! i took the check because i was new to the buisness, and couldn't walk away with nothing. A couple years later someone threatened to kill him, and the papers made out like he was a victim , people like this deserve what they get, he has made his bed and one day he well lay in it too, i just hope it doens't cost/hurt his family too.


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## ajslands (Sep 3, 2009)

you could put all the snow back! or if they end up not paying after 2 months you could talk to him and if they still dont pay, there are some herbicides that kill grass and trees. or you could dump a load of rock salt on there lots at the end of the season. :realmad::realmad:


or you could just forget about it. is it like a 3000$$ bill there not paying


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## Acmemechanic (Aug 27, 2005)

*Getting Paid For Services Rendered !!!*

It Is A Brand New World Out There. I am Afraid To Say Its Not All That Great Either.Last Year I did Snow Removal For A Franchise Of Fast Food Restaurants. After a Few Storms And Not Receiving Any Payments For Any Of Their Locations I Made A choice Not To show Up During a Real Decent Storm. Guess What The Phone starts To Ring From The Different Locations. Where Are You? Did Your Trucks Breakdown? 
Each Location Is Responsible to Forward Check Request To The Corporate Office And Some Managers Had My Invoices Still On their Desks.Others Were Forwarded and Were not Paid. The District Manager Who was Previously Real hard To Get a Hold Of Was Now Calling Me !! Imagine That !! I Simply Stated That Our Contract Reads NET 30 DAYS and as Payment Was Not Received I Felt No Obligation To Service Any Of The Locations.He Stated That It was A Minor Oversight and That Within A Half An Hour My Wife Could Pick up a Check At The Corporate Office 40 Miles Away !! She Did Indeed Get the Check and Within 45 Minutes All Stores Were Plowed and Sanded.
Sounds Like A Success Story Huh, Not By Far!!! We Continued to Service Those Locations The Rest Of The Winter. Spring Came, No Check, Summer Came, No Check. We Ended Up giving It to a Lawyer For Collection and At The end Of August We Got Paid MINUS His Fees.

Someone Told Me That In Donald Trumps Last Book He Details That Corporations Should Withhold Payment to All Subs For as Long as Possible. Then When They are As Hungry as They Can be Offer Them Around 35 cents on The Dollar. If thats How Business Is going To be Done from Now On. I Don't know What The Regular Person Is Going to Do.

I Closed My Garage, Sold My Plows, Moved to West Virginia and Now Punch a Time Card. Its A Little Tough after Being Your Own Boss For So Long. But I Am Not Buying The Quart Bottles of Pepto-Bismol Any More


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## grandview (Oct 9, 2005)

Acmemechanic;920212 said:


> It Is A Brand New World Out There. I am Afraid To Say Its Not All That Great Either.Last Year I did Snow Removal For A Franchise Of Fast Food Restaurants. After a Few Storms And Not Receiving Any Payments For Any Of Their Locations I Made A choice Not To show Up During a Real Decent Storm. Guess What The Phone starts To Ring From The Different Locations. Where Are You? Did Your Trucks Breakdown?
> Each Location Is Responsible to Forward Check Request To The Corporate Office And Some Managers Had My Invoices Still On their Desks.Others Were Forwarded and Were not Paid. The District Manager Who was Previously Real hard To Get a Hold Of Was Now Calling Me !! Imagine That !! I Simply Stated That Our Contract Reads NET 30 DAYS and as Payment Was Not Received I Felt No Obligation To Service Any Of The Locations.He Stated That It was A Minor Oversight and That Within A Half An Hour My Wife Could Pick up a Check At The Corporate Office 40 Miles Away !! She Did Indeed Get the Check and Within 45 Minutes All Stores Were Plowed and Sanded.
> Sounds Like A Success Story Huh, Not By Far!!! We Continued to Service Those Locations The Rest Of The Winter. Spring Came, No Check, Summer Came, No Check. We Ended Up giving It to a Lawyer For Collection and At The end Of August We Got Paid MINUS His Fees.
> 
> ...


No need to capitalize the first letter of each word!


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## Bajak (Nov 12, 2008)

grandview;920529 said:


> nO neeD tO capitalizE thE firsT letteR oF eacH worD!


It does make it hard to read....


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## TonawandaNY (Aug 3, 2009)

I dont think, or I hope it does not come to any of those nightmare stories. I believe the guy when he says he forgot to mail it. It is a busy location off a very busy rd. Worst case scenario I just go pick it up if it is not here before next week or the next storm which is not suppose to hit anytime this week.

It did not come today so it maybe here tomorrow. If not then sometime next week I will just drive down. 

Honestly, I believe, I hope we are all settled on this issue.


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## Winterized (Mar 3, 2007)

Have been dealing with slow and or no pays for over twenty years.......

Have come to the conclusion, there are no two alike! I would get sooooooooo mad over this I would let it ruin my life. Now I pretty much go with the flow and try to keep cool about it, and just peck away at a resolution I THINK will benefit me in the end. I have no one way of dealing with everyone.

Always be professional, honest and fair. Never make a threat unless you are ready to suffer the consequences should it blow up in your face. Know when to walk away and consider it a lesson learned. 

I must add.... I have never faced a situation that threatened to sink the ship financially either though. 

Good luck.


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## TonawandaNY (Aug 3, 2009)

Check came today.


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## grandview (Oct 9, 2005)

TonawandaNY;922578 said:


> Check came today.


But will it bounce ?:redbouncepurplebou


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## nms0219 (Jan 20, 2007)

oh dont say that, I had the bank call me today about one of those rubber checks.


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## TKLAWN (Jan 20, 2008)

It's a pretty safe bet that this account will continue to have you pull your hair out.


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## grandview (Oct 9, 2005)

Did it clear?


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## TonawandaNY (Aug 3, 2009)

It cleared! We are good to go.


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