1. Welcome to PlowSite. Notice a fresh look and new features? It’s now easier to share photos and videos, find popular topics fast, and enjoy expanded user profiles. If you have any questions, click HELP at the top or bottom of any page, or send an email to help@plowsite.com. We welcome your feedback.

    Dismiss Notice

How do you handle non-paying commercial accounts?

Discussion in 'Business Fundamentals' started by TonawandaNY, Dec 19, 2009.

  1. TonawandaNY

    TonawandaNY Senior Member
    Messages: 160

    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?
    Last edited: Dec 19, 2009
  2. dchr

    dchr Senior Member
    Messages: 159

    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.
  3. TonawandaNY

    TonawandaNY Senior Member
    Messages: 160

    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.

  4. 2COR517

    2COR517 PlowSite Fanatic
    Messages: 7,115

    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.
  5. mycirus

    mycirus Senior Member
    from Mass
    Messages: 589

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

    Two Seasons Junior Member
    Messages: 23

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

    creativedesigns PlowSite.com Addict
    Messages: 1,929

    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.

    They will never pay silly late fees! IMO:nod:
  8. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    Most are 30 days. Some companies only cut checks on the first and 15th of the month.
  9. suzuki0702

    suzuki0702 Senior Member
    Messages: 649

    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
  10. White Gardens

    White Gardens 2000 Club Member
    Messages: 2,665

    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.
  11. RepoMan207

    RepoMan207 PlowSite Fanatic
    from Maine
    Messages: 5,039

    Last edited: Dec 20, 2009
  12. TonawandaNY

    TonawandaNY Senior Member
    Messages: 160

    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.
  13. TonawandaNY

    TonawandaNY Senior Member
    Messages: 160

    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.
  14. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    To avoid confusion ,you should always send out an invoice.
  15. ff610

    ff610 Senior Member
    Messages: 320

    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.
  16. RepoMan207

    RepoMan207 PlowSite Fanatic
    from Maine
    Messages: 5,039

    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.
  17. StormRanger

    StormRanger Member
    from NorEast
    Messages: 72

    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'
  18. TonawandaNY

    TonawandaNY Senior Member
    Messages: 160

    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!

    THEGOLDPRO PlowSite Veteran
    Messages: 3,136

    have you tried waiting in the backseat of the guys car???
  20. TonawandaNY

    TonawandaNY Senior Member
    Messages: 160

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