Contractors and paying subs on time.

[c_land]

If you're typically a subcontractor, what do you do to ensure you get paid in a timely fashion outside of leins/stop notices.

I have someone that owes me about $8,900.00. Some invoices are 120 days outstanding. I finally threaten with a stop notice and all of a sudden an email shows up that they are preparing a check along with telling me to "cool my jets". I thought I was being pretty cool for the past 4 months, but I guess that just isn't cool enough.



Is there a better way of doing this without being a dick?

 

[ductape1000]

Nope


If you are not getting paid in a timely manner, get paid however you can and then find better people to work for.

 

[River Lynchmob]

In my opinion...nope.

Sent from my SM-G955U using Tapatalk

 

[Yellowboat]

Serve them, works the best.


I have almost 400k that people owe me as a gc. Just went too court for one Monday, won, but still no money.

 

[hallett21]

Serve them, works the best.


I have almost 400k that people owe me as a gc. Just went too court for one Monday, won, but still no money.

You’re in court more than any contractor I’ve heard of lol.

When do you have time to go to work?


Sent from my iPhone using Tapatalk

 

[Albert]

Add on the bottom of invoice interest rate 3.5% for each month late and rate does up after each month

 

[ChumpChange]

What kind of work do you do? I could use some extended terms for some work on my house.

 

[westair]

60 days tops .... anything beyond that and I will usually not take their work again.

 

[Yellowboat]

You’re in court more than any contractor I’ve heard of lol.

When do you have time to go to work?


Sent from my iPhone using Tapatalk

on average every 14 months lol.

 

[Deja_Vu]

IMO Asking to be paid in a timely manner is not being a dick.

 

[sirbob]

Add on the bottom of invoice interest rate 3.5% for each month late and rate does up after each month

And send another bill each month so they see the "new amount owed"

 

[Bigbore500r]

If you're typically a subcontractor, what do you do to ensure you get paid in a timely fashion outside of leins/stop notices.

I have someone that owes me about $8,900.00. Some invoices are 120 days outstanding. I finally threaten with a stop notice and all of a sudden an email shows up that they are preparing a check along with telling me to "cool my jets". I thought I was being pretty cool for the past 4 months, but I guess that just isn't cool enough.



Is there a better way of doing this without being a dick?

All depends, what is in your contract with the GC / owner ? If your PWP (paid when paid), it can take...well....a long time! Most of my projects are PWP and we see 60-90 day pay cycles as a result. Sometimes a stop notice is the only way to get them to quite abusing you, and dont feel bad - they are the ones holding on to your money and making interest off it / bankrolling there company. If I was going to file the stop notice, these would be my questions before doing so:
-Are they typically a good customer?
-Do they always pay this late, or is this isolated to a single project (meaning the PM on that job may be the issue, not the company in general)
-Is the value of what im about to file a stop notice for substantial, or is this small potatoes?

Sometimes you just need to go above that persons head and find out why the payments are coming late

 

[Bigbore500r]

Make sure your following the conditional waiver / unconditional waiver process to a T as well. Is there a billing process in place, or is it just "ill send you invoices as I complete stuff, you pay them when you get them"

 

[c_land]

Serve them, works the best.


I have almost 400k that people owe me as a gc. Just went too court for one Monday, won, but still no money.

I do not envy you, I have trouble sleeping at night with my much smaller issues.

I do have the finance charges added, didnt really seem to do anything to speed up the payment. I think I only use 1.5%. Maybe I'll increase that.

 

[c_land]

All depends, what is in your contract with the GC / owner ? If your PWP (paid when paid), it can take...well....a long time! Most of my projects are PWP and we see 60-90 day pay cycles as a result. Sometimes a stop notice is the only way to get them to quite abusing you, and dont feel bad - they are the ones holding on to your money and making interest off it / bankrolling there company. If I was going to file the stop notice, these would be my questions before doing so:
-Are they typically a good customer?
-Do they always pay this late, or is this isolated to a single project (meaning the PM on that job may be the issue, not the company in general)
-Is the value of what im about to file a stop notice for substantial, or is this small potatoes?

Sometimes you just need to go above that persons head and find out why the payments are coming late

Make sure your following the conditional waiver / unconditional waiver process to a T as well. Is there a billing process in place, or is it just "ill send you invoices as I complete stuff, you pay them when you get them"

Balfour Beatty is the prime, but I'm a sub to the grading contractor. I've set my terms at 30 days with no protest other than non payments.

I'm pretty new in dealing directly with contractors and the receiveables myself so all advice is appreciated.

 

[Yellowboat]

I do not envy you, I have trouble sleeping at night with my much smaller issues.

I do have the finance charges added, didnt really seem to do anything to speed up the payment. I think I only use 1.5%. Maybe I'll increase that.

In .a 1.5% a month

 

[milkmoney]

Continental oil pays 6 months out. I get my money every Friday or i won't work [emoji202]
And no , I don't work for continental oil
Sent from my SM-G930V using Tapatalk

 

[NicPaus]

Commercial 60-90 days thats why you should have a lot of capital.

I only do residential usually get paid within a week. But have a few regulars that take about 30 to pay. I think I only have 1 currently passed a month but I have only made 1 effort to collect. Another 2 waiting to close escrow then I will get a check.


Until you build up Capital those sleepless nights will be there. I lose sleep when I hit 40-50K owed. Usually around $20-30K is where I am at. Some friends that have been around for a while usually $150k-250k owed at any given time.

 

[boatpi]

Are we speaking about contractors or boat builders..

 

[LBLL]

As a Commercial / Industrial GC we issue subcontracts as paid when paid. There are some of our customers / owner's that pay slightly late and others that tend to hold on for 45+ days blaming the lender. This is becoming more common. Main issues we have with sub billings is, they track aging based on the date their invoice is generated not the end of the month when we issue owner billings. Subs are requested to project billings based on projected work to be completed by the end of the month and dated the last day of the month and we as a GC bill the owner by the last day of the month. Typically, we get paid in 30+ to 45 days, so IF our sub is tracking their aging based on a billing they generated on the 15th, 30 days looks like 45 and 45 looks like 60. Most subs understand, but some do not and it becomes a constant drag, so we drop them or they drop us.

 

[milkmoney]

Are we speaking about contractors or boat builders..

Yes [emoji6] [emoji202]

Sent from my SM-G930V using Tapatalk

 

[c_land]

Commercial 60-90 days thats why you should have a lot of capital.

I only do residential usually get paid within a week. But have a few regulars that take about 30 to pay. I think I only have 1 currently passed a month but I have only made 1 effort to collect. Another 2 waiting to close escrow then I will get a check.


Until you build up Capital those sleepless nights will be there. I lose sleep when I hit 40-50K owed. Usually around $20-30K is where I am at. Some friends that have been around for a while usually $150k-250k owed at any given time.

It's all a learning process I guess, I am pretty down on cash in this account and don't want to start new work because of it. I have yet to be paid from this client without first requesting a check. It's pretty tiring.

i'm used to seeing larger outstanding amounts for the civil design projects, but with public agencies i know i'll get paid on the exact day in the contract. This has just been an unknown.

 

[UltraLucky]

If you're typically a subcontractor, what do you do to ensure you get paid in a timely fashion outside of leins/stop notices.

I have someone that owes me about $8,900.00. Some invoices are 120 days outstanding. I finally threaten with a stop notice and all of a sudden an email shows up that they are preparing a check along with telling me to "cool my jets". I thought I was being pretty cool for the past 4 months, but I guess that just isn't cool enough.



Is there a better way of doing this without being a dick?

Every contractor and project is different. The paid when paid provision is predicated on them submitting items your invoicing for to the owner in a timely manner it also may be unenforceable in California if that is where you are working. The terms should be spelled out in your contract and don't be afraid to negotiate them. If your just starting out you can offer a discount for timely payments ie. 5% if paid with in 15 days of receipt. But the key is finding the right people to speak with and to contact them a regular basis (not just when they owe you money) in person or on the phone. If it is a Public works project find out who the contract manager is for the owner they can be very helpful if the contractor is unresponsive.

 

[c_land]

As a Commercial / Industrial GC we issue subcontracts as paid when paid. There are some of our customers / owner's that pay slightly late and others that tend to hold on for 45+ days blaming the lender. This is becoming more common. Main issues we have with sub billings is, they track aging based on the date their invoice is generated not the end of the month when we issue owner billings. Subs are requested to project billings based on projected work to be completed by the end of the month and dated the last day of the month and we as a GC bill the owner by the last day of the month. Typically, we get paid in 30+ to 45 days, so IF our sub is tracking their aging based on a billing they generated on the 15th, 30 days looks like 45 and 45 looks like 60. Most subs understand, but some do not and it becomes a constant drag, so we drop them or they drop us.

That is helpful. Going forward I'll try to align my billing cycles with my client contractor or GC.

 

[Yellowboat]

Get use too it. I had one last year that was 17 months behind and got a random check in the mail. I was not expecting that.

 

[NicPaus]

It's all a learning process I guess, I am pretty down on cash in this account and don't want to start new work because of it. I have yet to be paid from this client without first requesting a check. It's pretty tiring.

i'm used to seeing larger outstanding amounts for the civil design projects, but with public agencies i know i'll get paid on the exact day in the contract. This has just been an unknown.

I hear you I hate having to ask when they know they owe. Some are just that way you have to hound them constantly. I usually quit doing work for those types but when starting up you can't pass up work. Get your Contracts written with pay schedules clearly stated will help. I like my regular customers where we just get it done and get paid when finished but it took me 10 years to establish the relationship with them where we are on the same page. Not easy but hard work always pays off.

 

[Bobby V]

That is helpful. Going forward I'll try to align my billing cycles with my client contractor or GC.

Is the GC using Textura for billing.

 

[ROZ]

If you're typically a subcontractor, what do you do to ensure you get paid in a timely fashion outside of leins/stop notices.

I have someone that owes me about $8,900.00. Some invoices are 120 days outstanding. I finally threaten with a stop notice and all of a sudden an email shows up that they are preparing a check along with telling me to "cool my jets". I thought I was being pretty cool for the past 4 months, but I guess that just isn't cool enough.



Is there a better way of doing this without being a dick?

I don’t think threatening a stop work notice after not being paid for up to 120 days in some cases is being a dick.

I don’t know details, but my wife worked on a case where a contractor literally walked off a job over some type of dispute. Property owner sues and won. So cover your ass with plenty of notes , dates, and emails of contact with your client if you decide to cut your ties.



Sent from my iPhone using Tapatalk

 

[mash on it]

My invoices have '1% 10 days NET 30'
I also bill accounts receivable the next day via email. 'Signed Copy on File' in there too.
At 30 days, I email them with an invoice, and then every week. I can't bankroll a $40 million company, and won't. It's only a grand or two, but it's my paycheck.
90 days? They can kiss my ass. How's C.O.D. then? But I'm not a 'contractor'.

Dan'l

 

[DaveC]

Wait! You mean to tell me there are some GC that pay on time? Who knew

 

[Moody]

To all the GC out there......Dont ask your subs to finance your jobs.

 

[ChumpChange]

Get use too it. I had one last year that was 17 months behind and got a random check in the mail. I was not expecting that.

The stories you tell.......

To all the GC out there......Dont ask your subs to finance your jobs.

Why ask when you can just DO! It's not just contracting, it's business. From the small company getting terms from their vendors to the giants like WalMart. I remember it was just about five years ago, WalMart sent out a letter to their suppliers that their terms were being extended from 60 to 90 days. Do you know how much cash that freed up for WalMart? Product doesn't sit on the shelf that long. Sells in five days, they collect the cash, and now have another 85 days to use as operating capital. It put a big hurt on their suppliers though, needing lines of credit to finance those terms.

 

[River Lynchmob]

The stories you tell.......



Why ask when you can just DO! It's not just contracting, it's business. From the small company getting terms from their vendors to the giants like WalMart. I remember it was just about five years ago, WalMart sent out a letter to their suppliers that their terms were being extended from 60 to 90 days. Do you know how much cash that freed up for WalMart? Product doesn't sit on the shelf that long. Sells in five days, they collect the cash, and now have another 85 days to use as operating capital. It put a big hurt on their suppliers though, needing lines of credit to finance those terms.

One of the infinite reasons I hate Walmart.

 

[500bbc]

When not prime contractor I make sure twenty day notice is filed, past due notices sent, lien filed within the specified time frame then perfected if need be.
Had a developer try to stiff us for over $150,000.00, the retention, until they needed take out.

They fucked a bunch of poor sons of bitches.

Just liened a residential asshole a couple of months ago, he was trying to stall me past the filing time frame. Fucking attorney.

 

[ChumpChange]

One of the infinite reasons I hate Walmart.

I can give you plenty of more cut throat companies out there! They just do a better job of keeping up a good social profile.

 

[River Lynchmob]

I can give you plenty of more cut throat companies out there! They just do a better job of keeping up a good social profile.

Oh I know, they are all similar...Walmart's business practices are all just very well known.

 

[rivergames]

Gotta check up on the billing each month. After a few months of not getting paid, then you hammer the GC a few times a week for updates. If still no payment, time to drop the liens and stop notices.

Don't get too comfortable/relaxed and always watch where your $ is or will be.

 

[wishiknew]

Is the GC using Textura for billing.

I like textura have done about 5 jobs electronic billing once a month and paid direct deposit 30 days exactly

 

[Joker]

Do you prelim everything?

 

[Boat 405]

If you're typically a subcontractor, what do you do to ensure you get paid in a timely fashion outside of leins/stop notices.

I have someone that owes me about $8,900.00. Some invoices are 120 days outstanding. I finally threaten with a stop notice and all of a sudden an email shows up that they are preparing a check along with telling me to "cool my jets". I thought I was being pretty cool for the past 4 months, but I guess that just isn't cool enough.



Is there a better way of doing this without being a dick?

Progress payments.

 

[KENDOG689]

Had a general I was working for and did take him to court.Was agreed to be paid in a year in payments.5yrs later.....I still get a small check.

 

[KENDOG689]

In AZ.I ask for 20% upfront and bill every week.

 

[NicPaus]

In AZ.I ask for 20% upfront and bill every week.

Must be nice, CA we can only get 10% down and no more than a $1000.

 

[hallett21]

Must be nice, CA we can only get 10% down and no more than a $1000.

X2

Edit: then again every good I got fucked by a contractor story starts with “well after we gave him 50% up front”


Sent from my iPhone using Tapatalk

 

[KENDOG689]

Must be nice, CA we can only get 10% down and no more than a $1000.

Yes I know that in Ca,but finding a reliable framer here is like a needle in a hay stack.I worked for a guy that would ask for 50% upfront and always got it.Covered his cost but the other 50 was always slow pay.

 

[NicPaus]

Yes I know that in Ca,but finding a reliable framer here is like a needle in a hay stack.I worked for a guy that would ask for 50% upfront and always got it.Covered his cost but the other 50 was always slow pay.

10%Down 40% when material deliered. 40% when last materials dropped 10% upon completion this works out better than 2 payments

 

[KENDOG689]

Kinda different here.Most GCs supply the material and labor only.The lumber is always paid but that is why you bill for more upfront.All these fuckers learned how to do it in CA.Gotta play the game better.

 

[Rbcconst]

rbcconstruction.com

 

[locogringo]

Do mostly commercial roofing and related items, run our own crews and building a larger residential end now as well.

On commercial: 20% upon contract signing, 50% upon material delivery and commencement of work, then final 30% upon sign off of job.

Never had a problem on the commercial end.

Residential end has been good so far too.

Now, when subbing out work to GC’s: So far so good for all except one who is 60 days currently.

Progress payments is the only way to go and if you are able to, minimize sub-contracting work as much as possible.

 

[Yellowboat]

Must be nice, CA we can only get 10% down and no more than a $1000.

Which won't even buy most permits, it is a fucking joke.