Don't even get me started with that issue. We've had some bad ones. But, most people and businesses are not. It really depends on your business/industry, but, we, as a home care, ask for a security deposit upfront, before service starts, especially for clients that will have larger hours, like live-ins. We finally hired a part-time, accounts receivable person, to stay on top of it.
In my business, I start by provideing any potential clients with one hour of my time for free to see if we are a good fit and to go over my terms, should they wish to work with me. I evaluate the length of time that I feel I will need to assist them with establishing their business, and request a retainer based on the total amount. Because my preferred area is with start up businesses, they do not have a lot of money to throw around, so I keep the payments within their means. Once the retainer is used up, I request another retainer and continue working until it is used up. I do not work on a credit basis and I do not chase people for money. I also have a contract that gets signed, but that is more for liability reasons than financial reasons. In today's world, there is no reason that people should expect any business to provide them with credit - that is what banks are for. Those people providing physical services (ie car repair, in house repairs, or service providers) are in a different boat because you can't precharge someone to repair something due to the uncertainty of the final cost; however, you could have someone prepay you a certain amount for your service call (ie $75.00) that will be credited to their final bill. That way you are not completely stiffed should the cheque bounce or the bill goes unpaid. The longer a bill goes upaid, the less likely you will ever see your money.
I think that depends on several factors. Things like, can you afford the debt if the client doesn't pay. Is it a client you have worked with in the past and seems reliable (this will make the client feel special if your policy is to collect a deposit but you let them know that you trust them enough to not collect from them). Getting a credit card on file also helps in case the client doesn't pay for goods delivered.
In the Real Estate Industry, Agents usually do not get paid until the sold property goes thru escrow at closing. All monies are held by the title company and paid out to each of the parties described in the closing documents. If the deal should fall thru before close, the selling agent and buyers agent do not get paid. This has been a good system although it can happen where all the time and work put in can be lost if the deal falls thru. The ernest monies (deposit made by the buyer) is held by the title company and can be forfeited if the the fall thru was because of the buyer, however, this usually pays only the seller and the agents get nothing.
There should be an existingcontract in place outlining the payment agreement. If your company has the resources, hire a collections agency to collect on your behalf.
If the amount owed is excessive, a legal demand could be file in small claims court if the collections agency is unsuccessful.
Also consider the expense of court filing fees and related costs, i.e. Notary and/or Attorney costs.
Business from Cottonwood, AZ
Answered on Oct 8th, 2017
If you don't get paid up front then be sure you have a contract stating your terms. If you do not receive payment when do then have a professional legal letter that you send after the first reminder call fails. Your legal letter should restate your terms and the late fee that applies and again how long before the next late fee or if you will file with any court, etc. This of course depends on the type of business you are in. If you can file a mechanics lien make sure you know when that has to be done before you sell. If you are unsure of this contact SCORE that has mentors to help small businesses for free. They are retired business people and I love working with them.
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Answers (41-50)
Don't even get me started with that issue. We've had some bad ones. But, most people and businesses are not. It really depends on your business/industry, but, we, as a home care, ask for a security deposit upfront, before service starts, especially for clients that will have larger hours, like live-ins. We finally hired a part-time, accounts receivable person, to stay on top of it.
We are COD with all customers
In my business, I start by provideing any potential clients with one hour of my time for free to see if we are a good fit and to go over my terms, should they wish to work with me. I evaluate the length of time that I feel I will need to assist them with establishing their business, and request a retainer based on the total amount. Because my preferred area is with start up businesses, they do not have a lot of money to throw around, so I keep the payments within their means. Once the retainer is used up, I request another retainer and continue working until it is used up. I do not work on a credit basis and I do not chase people for money. I also have a contract that gets signed, but that is more for liability reasons than financial reasons. In today's world, there is no reason that people should expect any business to provide them with credit - that is what banks are for. Those people providing physical services (ie car repair, in house repairs, or service providers) are in a different boat because you can't precharge someone to repair something due to the uncertainty of the final cost; however, you could have someone prepay you a certain amount for your service call (ie $75.00) that will be credited to their final bill. That way you are not completely stiffed should the cheque bounce or the bill goes unpaid. The longer a bill goes upaid, the less likely you will ever see your money.
I think that depends on several factors. Things like, can you afford the debt if the client doesn't pay. Is it a client you have worked with in the past and seems reliable (this will make the client feel special if your policy is to collect a deposit but you let them know that you trust them enough to not collect from them). Getting a credit card on file also helps in case the client doesn't pay for goods delivered.
In the Real Estate Industry, Agents usually do not get paid until the sold property goes thru escrow at closing. All monies are held by the title company and paid out to each of the parties described in the closing documents. If the deal should fall thru before close, the selling agent and buyers agent do not get paid. This has been a good system although it can happen where all the time and work put in can be lost if the deal falls thru. The ernest monies (deposit made by the buyer) is held by the title company and can be forfeited if the the fall thru was because of the buyer, however, this usually pays only the seller and the agents get nothing.
Yes. I obtain full payment prior to working.
In my contracts I ask for 1/2 of job cost for materials , permits, etc. This way if there is a problem my expenditures are covered.
Contract language is key, That is the only legal protection we have.
Did you write up a binding contract, which spells out payment as each portion of the project is completed.
There should be an existingcontract in place outlining the payment agreement. If your company has the resources, hire a collections agency to collect on your behalf.
If the amount owed is excessive, a legal demand could be file in small claims court if the collections agency is unsuccessful.
Also consider the expense of court filing fees and related costs, i.e. Notary and/or Attorney costs.
If you don't get paid up front then be sure you have a contract stating your terms. If you do not receive payment when do then have a professional legal letter that you send after the first reminder call fails. Your legal letter should restate your terms and the late fee that applies and again how long before the next late fee or if you will file with any court, etc. This of course depends on the type of business you are in. If you can file a mechanics lien make sure you know when that has to be done before you sell. If you are unsure of this contact SCORE that has mentors to help small businesses for free. They are retired business people and I love working with them.