I have about 10 outstanding payments due me from various insurance companies, agencies, etc. Each are close to 3-4 weeks since I sent them.
I usually am pretty patient but how long do you wait before you start pushing folks? They are not private people so I am kind of at their mercy but jeez, a month for a $700 invoice is a bit much isn’t it?
Replies
Not really. I was talking to a sub this morning who is doing a commercial job. Invoices are due by the 5th of each month and paid on the 30th. If you deliver your invoice on the 6th you get paid 54 days later. In your situation I wouldn't even blink until at least 30 days has gone by. That's why I like homeowners... usually I get paid within 30 minutes.
Yeah, some of the other commercial work I have done has been this way. I guess insurance work is always there, you just have to be patient and wait....
Urgh
I don't see anything wrong with talking to local contact person and asking when you can expect a check. Nothing wrong with a polite casual question. Sometimes a phone call from them to a main office can make a difference.
A buddy of mine does work for a large co. with branch locations here. He has waited up to three months.
I used to be shy about asking for money, but I'm getting over it.
Apparently you have nothing set up with them on payment terms. You can gaurentee leaving it up to them means they will take as long as you let them.
Call them ASAP.
Apparently you have nothing set up with them on payment terms.>>>>>>>>>>>>>>>>.
Your payment terms mean nothing to an insurance or any larger business. They pay when the schedule they work on says to pay. Others have explained how it works. You send an invoice and if their cutoff is the 10th of the mth and your bill gets there the 11th, it means it goes into next months pile.
There is nothing wrong with asking how a company pays their bills. In fact, when dealing with a company of any size, it is appropriate to ask. You then will know how to bill.
Remember, thems with the money, sets' the rules!>G<
I used this mindset in my plan.
I dont use regulars for subs but I pay cash. I get the best pricing .
These folks that pay every 45 days need to pay more money.
People that pay in 30 days dont deserve the cheapest price structure.
Its best to stay away from drawing from inside straights and putting much money up over draws. An AK is wonderful to open a hand with but in reality it cant beat any pair so its a draw over time which is risky if its expensive as well. If you bet an AK cause it looks good and the other guy has a pair and hits a trey you are drawing dead if you hit either Aor K on the flop unless you got a flush draw. . YOU think you are leading at that point is the bad part.
MUch like bidding and waiting on money for customers that dont have time to pay you . You need more profit for the risk.
You need more profit for the risk>>>>>>>>>>>>>>>>>>
Learned the hard way!
There's usually a good reason why people pay in 30 days: they are doing a lot of business.
I have two gutter guys that I'm dealing with right now. One, we pay in 30 days. The other wants a check when the job is done. I'm saving about 4% for paying cash but I'd rather use the other guy. I don't have time to chase and pay the cash man.
Money and subs have always been power one way or another.
Ive seen subs instantly track their money down when they get done .
Ive seen subs hang a ticket in the door and leave to the next job and let the contractor have 30 days to pay.
The ones hanging a ticket arent working cheap. LIke you said like 4 to 5 percent . Not high enough to raise a flag.
"There's usually a good reason why people pay in 30 days: they are doing a lot of business. "
Yea , well if they are so busy why do they want you there so quick? Why are those people not happy with putting the work off for 30 days? Those people are in the biggest hurry but have to wait 30 days to pay?
Thats why I pay cash but I dont have to hunt them down. I like to take it to the job when they get done if they will call me . Its power blue. Next time you need that guy you want him pretty quick but you really need him to want to come .
Got a buddy who repairs commercial equipment, welders etc.
He tells me cash and credit card payers get priority service
and a percentage added to bills provides discounts going to quick payers on accounts due.
I like to take it to the job when they get done if they will call me . Its power blue. Next time you need that guy you want him pretty quick but you really need him to want to come .
I get the same results with the guy that will wait 30 days.
Maybe you don't mind running and paying everyday but I do. I really don't have time for that. If I'm building one roof per day, and each roof has gutters, I'd have to be Mr Johnny on The Spot too many times per day. I can't always plan on being in two places at once at the same time (wouldn't both crews end their day at the end of the day?).
Paying in 30 days is just normal business. If a gutter guy or roofer earns 2k per day, then he would have to bankroll (2 x 5 x 4) 40k. A 40k loan from the bank would be about 10% per annum if you have bad credit. So, that loan will equal about $333 to carry. Do you think it might be worth it to carry a $333 bill each month to keep a steady customer...one who is feeding you daily?
So, the guy charging us 4% more is only paying 1% for that money. He's 3% ahead of the game. Yes, he has to wait 30 days but he's making an additional $999 for his wait.
Business is business.
"Business is business."
Yup and poker is poker.
I can pull one of your roofers any time I want to . I do it all the time .
If you can make them wait 30 days you can darn sure wait on them.
I know you can get it done and 4 percrent is good money on top but they will take my gravy any day I want them there.
Reason is you have to have both types of customers. Its fair all the way around . Business is business as you say.
I dont have a lot of work so I have to have somthing going to compete with contractors that keep them busy. Ive been paying cash for 15 years and the whole town knows it . They know who they are talking to when I call them. I pay cash to agents that sell my properties also. They all know .
You can figgure the 4 percent as a cost of doing business but I cannot. Im stuck with the bill on the house to pay myself .
I can pull one of your roofers any time I want to . I do it all the time .
The roofers aren't waiting for 30 days. I haven't met any that can wait that long. But, if I'm working the roofers three, four or five days a week, I can guarantee that you won't "pull them" off our job just because you're paying cash. Do you really think a roofer would cancel one of our jobs, and risk 300k of income just because you have one job that pays cash quickly?
Every crew develops their loyalties for whatever reason. It might be money, it might be cash quickly or it might be they are getting 3/4 of their year's work from one source. Sometimes money talks, sometimes volume talks. Every sub makes his own decisions.
You might have the roofers pretty well booked up, but if Tim shows up and offers them a roof, they'll probably say yes and try to squeeze it in between yours. They won't cancel you, just push you back a little.
I disagree.
I was a subcontractor for several decades. I had many, many, many people walk up and talk to me about framing their homes and PAYING CASH. I never took any of them up. Why? I was too busy working for the bulders that were giving me steady work.
There were other crews that would drool and jump when these people came in offering "cash". To me, it all spends the same, cash or check. I chose to stay loyal to the guys that were feeding me steady. That's just me though. There are others like me, I'm sure. So, while some may jump when Tim decides to "pull them off", others won't even entertain the idea.
One other thing. I knew from experience that most people offering "cash" thought that everyone should work 25-50% cheaper than their normal rates. So, I developed an aversion for working for people who paid "cash". I typically found that it was a waste of my time to investitgate their projects.
I think this is right. If you have a well capitalized business 30 days is meaningless. If you are willing to bump a good net 30 customer because someone else offers cash you are signaling being broke or desperate. Google "confidential factoring" to see the steps businesses take to avoid sending that signal. Unlesss you want to get pushed around you should never let customers know you need their business that badly.
As a professional, I would take an offer of cash with some expectations attached as an insult.
Payment within 30-days may have more to do with: In most states, thirty-days after the completion of work is the statutory limit on when you can first lien the property. And, in many instances you must file the lien with 60 or ninety days after completion, if you want it to be enforceable.
I don't have time to chase and pay the cash man.
Let him chase you.copper p0rn
I was thinking the same. I never had a contractor chase me to pay me.
"
I was thinking the same. I never had a contractor chase me to pay me."
You never worked for me . But the reason they dont do it , never do it , is part of the reason I do. Some people want to set themselve apart by quality. I try to be better to them than their other clients so when the time comes I need them they will want to come .
Dale Carnege taught those values. "I am sure glad I got to meet that person today! "
Be that person.
I'm a pay on Friday kinda guy. The problem is: I don't know where I'm going to be on Friday. So, we all end up meeting somewhere convenient for both. I suppose I could be hard nosed but I think more like you when it comes to paying.
"
I don't have time to chase and pay the cash man.
Let him chase you."
Thats acceptable . I tell them to call me now on the conventional cell phone every one has now like a right and left hand .
This thread started out on waiting on insurance . Now every one is having takes from different routes.
Theres a lot of difference between home owner , contractor, sub , school , city goverment , factory, etc. This subject is going every where.
I suggest on an amount a person is not comfortbale carrying for 90 days then other considerations be made . I was faced with the same dilema 35 yrs ago. I was the only commercial painting company in town. You could hire a house painter but not a crew with lots of equipment and plenty of help to complete a job while they werent working . For years I was scheduled to work in a plant for 2 weeks when they shut down. I never had a Christmas day at home . Same thing for eating places and all other business. Schools have work done in the summer unless they have an emergency of sorts and you might be there at night or weekends or holidays . I always did a third to a half of my business commercial. They all pay in 45 to 90 days . All good as gold in the vault but its a process.
I finally went to the bank and told the banker I was getting too much of that work I couldnt handle it financially. He set up a a construction loan off signed contracts. At the time I was doing all factories and they wanted me at other locations out of town. It was our biggest industry. Tyson Foods which had all kinds of buildings every where in different towns . Mostly processing plants but they had cold storage , feed mills, offices, etc. Tyson Foods in Arkansas is huge . They actually wanted me exclusively like Brown and Root Construction and I wasnt a pea in the pot as big as them. I didnt want them to be 100 percent of my business either and let other customers go somewhere else . I wanted them all and it finaly became impossible . I could have used an agent then with money. That business is as big as you can afford it to be .
Anyway I started tacking 10 percent per month on expected payments on the bids. It didnt make a bit of difference . They still paid it . Tyson Foods got a 30 percent increase just off the payment schedule . They kept comming wanting more. In fact as I figgured out I was so cheap to them under Brown and Root they wanted me to do a lot of repairs . Will you build us a nurses office ? Will you build cabinets for the offices? We heard you built a tool display for Craftsmen tools at the Singer company and remodeled some offices. I was putting in commercial ceilings by then as well for all of them which should have been a business alone . I finally just quit them and they went elsewhere. I didnt have the business training for it or the money or the right person to help me with it . I felt like it was over my head but I bought a new pick up with my check book . It was more money than Id ever had in my life but I got scared. The banker had set a 100,000 limit and I was using it at 24 years old. He was a little edgy too over it. He wasnt there for financial advice but thats what I needed .
When we talk about commecial it can get too big for anyone . Same with totally insurance work. I had 22 contracts in 1980 in one week. I had them cut the checks on the jobs to me and the owner or I walked . They did it . I couldnt have done all that work with out the money. That wasnt near as big as the factories either but I didnt have that kind of money to front it .
My Brother hit that storm doing rebuilds only what his hands could touch . He took two jobs . Both pretty bad . He had 20 grand in his hands after he got every one paid including himself every week. It was three months work for both of us as it turned out . I had 30 grand in the bank . Its hard not to take some risks . I was a little over my head but he wasnt . Back then if the storm would not have come I probably wouldnt have 5 grand in the bank. I doubt he would have either but I dont know what his finances were like building houses. He bought a backhoe with it . He couldnt have done that.
The rewards are worth getting financing if it cant be worked out .
I work with insurance company claims, businesses and homeowners.
Some try to set the terms and if they aren't to my liking we won't do business. I have never ever found one that wasn't negotiable. Remember... someone sitting behind a desk one day decided what the standard will be..... they can also change it.
I will never go in blindly billing a customer expecting them to pay on their terms. It's just not a good business model.
I'm in a different field (IT), but in my experience with commercial you can put "due upon receipt" all you want; the customer will ignore it. I still put it on my invoices though. It's my "opening bid." Most of the time I get paid in 30 days. Hospitals and schools take months to pay. If an invoice hits 45 days old I send a polite email, it's almost always a simple oversight. I haven't been burned much, fortunately. I think it's important to realize that when you are the vendor the customer has a lot of power over how the transaction goes and when you get paid. To me, a vendor being too forceful with terms signals a lack of trust, or financial distress, or incompetence. I'd rather not do business with a customer I don't trust than try to compensate with special terms. They'll just find another way to burn you.
I'm in a different field (IT), but in my experience with commercial you can put "due upon receipt" all you want; the customer will ignore it. I still put it on my invoices though. It's my "opening bid." Most of the time I get paid in 30 days. Hospitals and schools take months to pay. If an invoice hits 45 days old I send a polite email, it's almost always a simple oversight. I haven't been burned much, fortunately. I think it's important to realize that when you are the vendor the customer has a lot of power over how the transaction goes and when you get paid. To me, a vendor being too forceful with terms signals a lack of trust, or financial distress, or incompetence. I'd rather not do business with a customer I don't trust than try to compensate with special terms. They'll just find another way to burn you.>>>>>>>>
My experience is the same as yours, and I agree with your last sentance!
I did a job for a school where I was told I'd get paid after the board meeting which was little less than a month away. After the board meeting I was told checks didn't get written until the 25th. (The board meeting was around the first).Next year they wanted more work done. I said no."Why?"
"I don't want to carry my materials for 60 days."
"Why didn't you say so? I can get the board to pre-approve and get a check cut on completion."Never know until you ask."To me, a vendor being too forceful with terms signals a lack of trust, or financial distress, or incompetence."There's a concrete contractor here who has been in business for forty years and has a sterling reputation. While I was working at the school he tells me they don't want to pay him for a job he completed the day before. A few minutes later, he walks by smiling, holding a check.It's a very small town and I've never heard anything bad about him.You sell an idea to get a job, why not sell them on paying you?
Eldan,
Had a buddy in steel building design and build.
He wouldn't bid on any state construction since they could take up to 6 months to pay. He watched several competitors fold up because the went after so much gov't work and couldn't pay their bills.Pete
That's a direct consequence of inadequate working capital. What a shame to turn that business away. If it was me and I didn't have the reserves I might look into a revolving line of credit and bid on those state jobs.
Eldan,
That would have been a good idea.
As it is Duane was very successful doing his thing and worked off of his reputation to keep busy.
Sold his company and retired at 60.
Does consulting and design and plays golf.Pete
Some try to set the terms and if they aren't to my liking we won't do business>>>>>>>>>>>>>>>>>>>>
Your perogative.
I have never ever found one that wasn't negotiable.>>>>>>>>>>>>>>>>>
Bull. The larger a company, the less negotiable they become.
one day decided what the standard will be..... they can also change it>>>>>>>>>>>>>>
And they will change it for you? Bull. I have worked and billed some of the largest US companies and there is very little if any leeway, unless they need you to fix one of their mistakes, and even then there is little flexibility.
The accountants set the rules and the company lives with them.
When I worked in the automotive insustry, payment terms were a huge sticking point with suppliers. Our invoice cutoff was the tenth of the month.
And ya got paid at the end of the second month.
So if your invoice was received on the 11th, you'd be just about ready to file bankruptcy when you got a check.
Me? I do so little insurance and commercial work that this doesn't matter. My other customers know that when the punch list is done, my hand is out, waiting for the payment.
I won't be laughing at the lies when I'm gone,
And I can't question how or when or why when I'm gone;
I can't live proud enough to die when I'm gone,
So I guess I'll have to do it while I'm here. (Phil Ochs)
Next time/job make them agree to the same terms they demand of you as a customer.
I'm not flippin' you off.........just counting cubits
Your standard of living will eventually diminish to your standard of buying. Think about it.
Since you haven't filled out any of your profile information I can't do an online check to see what the law is where you are.
Some states have very strict time limits on payments to contractors. Some don't have any at all.
I believe he is in Fla!
I hate this part of the business. I usually place a phone call after a month. I am of the school of thought that if you can't pay for in 30 days you shouldn't be getting the work done in the first place. I look at myself like a store who doesn't offer financing. After I have fulfilled my end of the contract, they must to theirs.
I have at the same time learnt that clients can have extenuating circumstances, health issues, hospitalization etc.. so it goes case by case. It is a sticky situation.
I would place a call letting them know the payment is outstanding, and that interest will be added... would they like you to come by and pick it up, are there any outstanding problems etc...
Hi ORM,
I usually am pretty patient but how long do you wait before you start pushing folks?
I push the day they said I'll have it.
When I submit an invoice to a new client, that payment is due upon receipt.
I continue with, I understand this is not the norm for most businesses as check processing often doesn't occur daily nor always on site. With this understanding can you please provide me with an expected date of full payment?
Some will respond tomorrow, some twice a month, some 90 days. etc. but whatever date they give me is when I lay it on the line with them. Although I, like most folks would like to have it that day, I never have a problem carrying reputable company's extended periods as long as I know what that period is.
I have some clients that want me to wait for the check so they don't have to spend money on a stamp and envelope. I have some that pay every Thursday one week minimum so if you submit on Wednesday of that week.....you get it the following Thursday....8 days. I have another that if it's less than $1000 submitted in a one week period, you'll have it the following Friday.....if it's over $1000 in one week, it requires a second signature from some unseen person and you'll get it anywhere from one week to 3 months. I've had $1200 work with them before and simply gave them part of the bill on one invoice for $950 and turned in the rest on another invoice the following week for $250. Everybody is happy.
So my recommendation is to simply ask when you'll be paid and make a note of it in front of the person who gave you the info. If they say 2 to 4 weeks......wait 4 weeks and call. You can then state "I submitted an invoice on zzzz and Mrs. Smith informed me that invoices are paid by this date. Will you please assist me in tracking the payment that should have been received by now?"
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I've not had to deal with this since I moved to the construction business, but in my previous life as a freelance photographer, I had pretty much accepted that I should be ready to live without the money owed for up to 3 months.That said, there were those clients that really pushed the envelope, and I had to adjust my tolerances for them. I had one client who would routinely push it out six months. Eventually I would only work COD for.Steve
After 30 days re invoice with interest added, 1.5%
When writing commercial contracts I add a 2-3% discount if paid within 10 or 15 days, of course this amount is built into the bid.
Most companies jump on that but you should always point it out
I've dealt with a millwork supplier that gave a 2% within 10 days, helped with their cash flow really well
No one should regard themselve as "God's gift to man." But rather a mere man whos gifts are from God.
My longest wait for an insurance company was 4 months.
FOr a builder 90 days.........with the exception of one who owed me money for the entire time I was deployed in 2002-2003.................and finally paid me when a friend told him I would be home in a few weeks and my first order of business was to get my money one way or another.
With the Insurance Company there may or may not be a process which involves verification/inspection of the work and a sign off buy the owner/policy holder......AND THEN........they start processing the payment.
everyone is stretching out accounts payable to 30 or 60 days.
We start dunning them after they hit 21 days.
sully