So, I have a lot of ccu customers that are not only the construction company owners themselves but cleaning companies that contract me out as well and pretty much piggy back my bid on their invoices etc. I don’t have a problem with builders paying me as soon as the job is completed but companies that contract me to do windows which are basically are the middle man are making it a real hassle to be paid in a timely manner. My invoices state a due date and a lot of the companies exceed the due date and I find myself checking up on them and dragging payment out of them. Do any of you guys add late fees on your invoices after a certain day, and if so what’s reasonable? I started to say $25 per day but I don’t know. I can’t keep letting these companies do this to me.
I believe you can only charge up to 10-20% a year, depending on your laws. I have a 2.0% increase after 30 days and every month after for a total of 10 months.
The answer to that is to stop giving credit when they havent earned it yet. It won’t work with a number of large corporations but the ones who you are talking about should be able to pay you when you are done.
Heck, if it takes a week to finish the job ask for a percentage at the end of the first day and the rest day of completion.
The construction companies will do a loan draw from the bank in set increments and sometimes that can be up to 90 days. That needs to be ironed out before you even set foot on the job tho.
I’m about to do one that may take close to three weeks to complete. I have to have money to float everyone thats going to be there including myself. I can’t go and do a house real quick and come back so that the family can eat. I can’t leave the site most cases.
Trust me, that construction company KNOWS you need the cash too. Just change your policy. Its worked for me, its also been the reason I wasn’t chosen on certain projects tho too. One’s I didn’t really want anyway tho. Look, they HAVE the money. They just need to know that just like you jump thru hoops to accommodate them and their pet peeves, you expect them to have the same pep in their step and care about you getting your money that was agreed upon…but do that WHILE you are needed not after the fact. Outta site outta mind…
Just be honest with them man.
Well put @thorSG1!
If more people thought this way they would have less of a headache dealing with construction and commercial accounts!
Once again, well put my friend!
I have almost decided that I am not going to do this anymore. If a cleaning company such as this one approaches me again I will then say yes I will throw a bid but I need to deal with the builder directly because I will not have a middle man managing the invoicing process for this very reason. Once you do this you automatically have to become submissive to the companies invoicing process and that’s not ok with me anymore. Like I said, direct agreement with builders has never led me into any problems getting paid as soon as the job was completed. It’s just these companies that approach me. I don’t want to chase anyone for my money and i dang sure am not going to wait a month down the road when I have taken a day or two out of my busy schedule to accommodate them for what is needed. I am all for invoicing someone that I know is going to take a bit of time to pay and agreeing but when I’m led to believe that isn’t the case and it’s an immediate payment upon completion, it’s a different situation. Pretty much, if you need windows you need to deal with me directly because these cleaning companies don’t know anything about the process and just want to make a buck off of you if they can. Irritated me.
It’s your business you set your terms, it will eliminate you from doing a lot of subcontracting work in many places. The percentage of late fees is based on your state laws.
It is very common for subcontractors to get paid later because they want to ensure their payment is made to them prior. Right or wrong that’s just the way it’s always been. That middleman has been screwed many times for subcontractors not completing the work thoroughly getting paid and then this main contractor being stuck.
I honestly don’t understand why it’s such a big deal that you have to get paid the Day of Service or even a few days after.
In more cases than not you are getting paid it’s not like you’re putting a huge line of credit out there that’s going to take months to get paid.
At first I was very much against doing work that didn’t pay upon completion. Partly out of the fear of getting screwed, partly because I didn’t have much money in the bank.
After you have been in the game awhile you start to see things differently. Some work just takes time to get paid, if you want to pursue that kind of work. Being the sub of a sub, you are the last guy to get paid. Most of my CCU is dealing with the builder, but I don’t turn down sub work if it pays my price.
My terms are spelled out clearly in the bid. I don’t offer terms greater than 30 days. If they can’t pay you in 30 days, I don’t want to deal with them.
In my opinion it’s wrong. I never understood that in this industry, why would you wait for someone else to get payed so you can get payed that just creating another thing that can go wrong.
I have corporate accounts that pay terms (I’m good with that) but as subcontractor (when I do it) I get payed as soon as the scope of my job is complete, not when they get payed.
Trust me, I’m not presenting myself as an authority on this at all. As I see it, money usually runs downhill. No middle sub wants to not get paid by his contractor while he already paid his sub. It makes him a two time loser - no money in and out the money he paid. He likely already paid his employees and his overhead, but that’s it.
Construction is an unstable, shifty business. All it takes is a recession, bankruptcy or the primary customer dying in a car wreck and the whole job could fall apart. No contractor wants to be left standing when the music stops. It’s not fair and it can usually be litigated in court, but it takes time. And your paperwork must be in order. No add ons without authorization. And you better hope your contractor has all his ducks in a row as well.
Finally, while it is your business, you often don’t get to set the terms. You can merely accept or not accept their terms. Not fair, but the way it is from my vantage.
I hear ya but you know as well as I do that large ccu’s always tie windows to the janitorial outfit. the contract for them MAKES them sub out to window cleaners. It’s going to be very rare that the prime will deal directly with you when it comes to payment. you shouldn’t be chasing money, I’m with you man. again tho even the janitorial outfits have money man.
our industry just simply has a cash flow problem…in commercial.
You just need to make your invoices 40-30-30 on large gigs. If they can’t swing it, then they ain’t gonna pay you later either.
I have one sub of sub account that is regularly a few jobs a week. When we first started working together we set terms of weekly invoicing, with credit card on file. Submit the invoice and bill the card, worth the card fee for the lack of headaches.
Excellent idea. I’m going to file that one away. You are a clever monkey…
Locally, the large commercial properties and management companies don’t want to do business with a company that is not established or small.
They lay out their terms of payment, we as business owners get to decide if we want to do work under the terms given or negotiate.
Many window companies here can’t afford to service large commercial just because they are not financial stable and these are the ones corporate doesn’t want to work with.
I can see your point.
All I’m saying, if I sub work I get payed as soon as my scope of work is done and signed off on. I’m not going to left holding a useless piece of paper that says “invoice, payment due”… that piece of paper doesn’t pay the bills… but greenbacks do!
Bingo we have a winner! 
