"Stiffed" as a board

[Deck Source]

I take pride in our efforts to provide quality work with excellent products at a fair price. I give free estimates. If a customer chooses to take advantage of our services, I give them a brochure that explains our services step-by-step. I also give them an "FAQ" sheet that answers the most frequently asked questions about our products. At job completion, I prefer to mail out invoices for record keeping purposes. The invoice reads "due and payable upon receipt". I will also accept payment on the spot if the customer prefers.
This year, however, I have had some trouble collecting payments. One guy continues to promise payment, but it's been almost two months since job completion. Another lady refuses to pay because the sealer we use does not bead water. She insists it must bead water to be effective, even though I have explained why the product does not bead water and this is also explained in the "FAQ" sheet. I think it's a weak attempt to find fault in our work so she does not have to pay.
Other excuses are "I don't have the money right now" or "I didn't expect the bill to be so high". I never charge more than I estimate unless further work is required. In these cases I always inform the customer. And, why would someone ask to have work done if they don't have the means to pay?
My question is this--What is the most effective method to collect debts? Should I charge interest; establish a pre-payment plan; utilize the legal system; or send my friend Vito to inflict a little pain?

 

[Dakotawash]

Hey Decksource,
I have felt your pain many times! Most times I have trouble with payment is when I bid things a little low(trying to be nice) or to people who have tons of money and like to wait it out! I since have started to get a down payment of 30 to 50% when I come to wash the deck with the balance due when the job is completed. This works most of the time. If the people are not home when I return to stain, I give them 30 days to remit the balance before I start calling. I stress to them when I bid the job that this what I expect to keep myself in business. I stopped doing jobs cheap because it still takes time and fixed expenses to do any job, and if you have any problems with the job, you are at a "non-profit" situation, which really sucks. I only get about 50% of the jobs I bid, but I know that the jobs I get are going to be profitable.I hope this helps and good luck in the future!

Jerry
Dakotawash Deck & Siding Restoration
Sioux Falls, SD

 

[JR Wood]

My estimate says payment due upon satisfactory completion.I go right to the door the minute I am done with the job,show the customer the job and ask for payment.The thing that always seem to happen is the customer will be home when I start sealing and it seems that I will be about 5 minutes until I am done, when I hear the garage door open and see them drive away.I go to the next job and come back after work and get paid.I usually work late so the customer does not expect me to show up at 7:30 at night, so I almost always get paid.If you bill a customer it gives them time to come up with an excuse for not paying. it also gives unforseen circumstances to arise that could screw you.The customer might have the money at the time they hired you,but something could happen that changes their financial situation.When that happens you are last on their list to make a payment to.

 

[Jon Fife]

whats up decksource,

The first thing you need to decide is low you are willing to go to get your money. You can wait it out or be aggressive. One thing you could do is park your truck on the street in front of their house and sit a big sign in the back of it that says 'Mr. Smith does not pay his bills'. Legal, harmless and embarrassing. Are you willing to do that to get your money?? Most aren't, but I imagine it would work.

What I plan on doing next year is taking credit card via PayPal or something similar. I will get 30% up front, and balance at completion. If they are going to stiff someone, let it be Visa. A lot of people talk about the extra expense of taking cards, but I think it is going to save so many headaches and will definitely improve cash flow.

Always, always have a talk before you start the job regarding payment. RIght now, I don't take anything up front unless it is a really big job. But before I start, I tell the customer we need to talk about payment. I tell them I don't expect anything until we are done, but before I leave I expect to be paid. If they act like this is a problem, let it be a red flag.

good luck,

Jon Fife
Nashville,TN

Man, get a lawyer and sue that lady who says she won't pay because of the beading. She never planned on paying you, so get the lawyer, follow through, and let her pay the legal bills. Also charge the maximum amount of interest possible. That really pisses right off. On second thought, send Vito.

 

[ParadiseProWash]

I washed this huge 6000sq ft house and the guy was outside all day until 10 minutes before I finished. I goto the door and his son answers the door and says his dad is asleep. I said that I charged $60.00 an hr regardless of weather I was washing or sitting and waiting for him to wake up and that I would be glad to wait a couple of hrs maybe even take a nap myself on his clock. Well 2 minutes later I am receiving a check and a dirty look but oh well I got paid.

 

[Beth]

Take the customer to small claims court. Put a lein on the home when you win. You'll get your money....a home can't go through settlement without satisfying all debts (leins)!!!

We have one and possibly a second we will have to do that with, which brings me to the comment about credit cards. Accepting Visa and MAstercard is not a foolproof way of being covered. You can be charged back.

We are fighting a chargeback now because....are you ready for THIS???? Because the customer claims the vehicle (our crewman's) left an oil stain on his asphalt driveway. Now we didn't enter into an agreement to clean the driveway, nor did he tell us he was going to REPAVE the driveway and CHARGE BACK to the card, to cover his expense. We could have cleaned it, heck, HE could have cleaned it! (grumble grouse) The guy is a lawyer (or claims to be) and I tell you, if the chargeback goes through it is going to small claims....

I don't put up with non-payment.

Had a commercial customer that was supposed to pay upon completion - three weeks ago. The lady in accounts payable called today with the latest excuse....they need an invoice, not a statement - three weeks later. She's going to love her voice mail in the morning. I told her she had 48 hours to pay the bill. Period.

grrrrr......

Beth

 

[Jon]

I don't really have the problems most of you seem to have but then I don't do residential work.

The few I did when I started in this business convinced me the way to go was industrial/commerical accounts.

I bill them, they have 30 days to pay and I get my checks.

Some require a DUNS number as a vendor and they pay using that number, fine with me as long as I get my checks.

Maybe I am also to easy, I am from the old school, handskake and word is good for me as long as you keep your end of it.

Now send they customer a reqistered letter with proof of receipt, state clearly in the letter he has 10 days to pay and if no payment you will start legal action for the money.

Key word LEGAL ACTION, sure it is small claims court but you don't mention that till he gets served by the marshall.

 

[Ron Strickland/Xtrerior S]

Small claims court does wonders
Ron

 

[reedsterstl]

I clearly state in my bid to the customer that a 25% deposit is required before work begins to cover the cost of chemicals. And the balance is due upon completion of work. Most of the time the homeowner is watching me day by day and I tell him daily how I am progressing and when to expect completion. The day before the final "stuff" is done, I tell them that I will be done tomorrow and state the due balance. I also tell them if they are not going to be home just put the check in a zip lock bag and put it under the door mat.

 

[Scott Lefler]

After being stiffed a few times, I learned to take half the balance after completion of the powerwashing. I tell them that it covers the cost of the powerwashing. Then I tell them that the balance is due upon completion of the job. If they are not going to be home I ask them to leave a check in the door. I treat the powerwashing and sealing of the deck as two separet jobs. I have gotten screwed once this year, but I am convinced that it would have been much worse if I had done it any other way. I won't do the job if there is no check, I don't work for free. That is a good way to find out who doesn't want to pay. If the customer leaves the site, always go back THAT DAY and collect. Like someone said, the longer you wait the less likely you are to get paid. Also, the worst is when you get screwed after you stain the deck because you had to buy the supplies, which are expensive. If the customer gets offended by this method, they are probably out to get you anyway. 99% won't give you a hassle about it. One guy I did this year decided to do his deck himself and sprayed stain all over his house. He hired me to clean it up and pw his trailor. He wrote me a check and then cancelled it. After numerous attempts to get ahold of him, I have come to the realization that he isn't going to pay. I will see him in court. One thing I like to do is wait until the end of the season and then sue all of the folks who think I work for free, it saves me the hassle of worrying about it all the time, when I can just nail 'em all at the same time.

....by the way, this site is awsome!

Good luck,


Scott

(MICHIGAN POWERWASH)

 

[Target P/W]

Beth, does this mean that we (I) sould make the customer sign a legal document that outlines all of these different topics?.
If so, do you have a copy for reference?.

Thank-you.

 

[Deck Works]

A few suggestions to prevent non payment:
1) require 25% upfront before you even start the job. That will at least cover your expenses for stain.

2) 75% at completion. NOT 30 days, at Completion. Show up until they pay.

3) Go over this when they are accepting the bid - explain to them you have bills etc to pay and you expect payment upon completion of work. Make them sign the contract, date, and write the stain choice as well on contract.

4) take pictures before and after the job.

If you haven't been paid:
1) Send a letter requesting payment. This must be done certified and return receipt requested to hold up in court

2) 30 days later and still no payment send another indicating a MECHANICS LEIN will be placed on there house and a finance charge will be added to there outstanding Account Receiveable.
Let them know that they will be unable to sell their property while this lein is intact and it will tarnish their credit.

3) Still no payment - small claims court.

In 3 years of business I have had one lady who would not pay me b/c she said there were footprints on her deck. B.S it was the grain but anyway that has been my only issue. She paid me $1100 for her fence but would not pay me the $225 she owed me for pwing and staining floor of deck only. I did all of the above steps but #3. for me $225 wasn't worth actually filling the lien and going to court. I got screwed but it taught me a lesson.

 

[Steven Rowlett]

non payment

Join your local credit reporting bureau. When they don't pay, report them. It won't get you your money but they will remember you FOR THE NEXT SEVEN YEARS. That is the lenght of time it will be on their credit report.

 

[Glenn]

Steve,
I got the picture of the deck but didn't get what you were asking or showing. Was it a after shot of a deck you had done?
Glenn