What's worse than covid-19? Customers not paying.

signspark1988

New Member
Guys,
We've all been in this situation.

"I'm outside the country right now"
"The check has been sent"
"take me to court!"
Doesn't pick up calls, emails and text.
etc...

Let's go over all legal ways to getting our customers to pay on time.
I've tried collection agencies and calling.

Help a brotha out here.
 

Notarealsignguy

Active Member
Get it all up front or accept the fact that some wont pay. If you cant afford to not get paid then dont do it without money in hand.
I dont stress over the couple of jerk offs that stick me. I took one to court before and it was a waste of time and took a few years off my life. Another option is to hire an admin and make that part of their job. A good one will wear them out until they pay.
 

binki

Premium Subscriber
Given that the courts are closed this won't work but what we have done in the past is Small Claims. In California once you have a judgement you can attach property and force the sale or if it is a business you can to a 'till drop' where the Sheriff goes in and just takes cash. You can also force the sale of non real property or you can put a lien on real property. The lien on real property is the best bet because it is harder to discharge in bankruptcy court.

Our problems with collections has mostly been bounce checks in the past however we did have 2 government accounts go over 180 days even though we had a PO from them. They eventually paid but it took almost daily calls to get the payments.
 

bannertime

Active Member
Our problems with collections has mostly been bounce checks in the past however we did have 2 government accounts go over 180 days even though we had a PO from them. They eventually paid but it took almost daily calls to get the payments.

One school district was 90 days before they called and said "hey we'll pay this, but..." on the other hand you get those companies that try and set their own terms like "we use a third party and payments are typically 90 days." Okay well you get a late fee since you're on Net 30. "we won't pay it, it's 90 days or nothing." Like wtf.
 

ikarasu

Active Member
Theres a company we work with a lot. A parking company... Well, we just did 2 big orders for them, to the tune of $15,000 each for 2 different locations. Covid hit.... The government ordered all parking enforcement to stop, including collection of parking at the hospitals... and now they have cash flow issues. They got one of their orders.... but when they were ready for the second we had to tell them we couldn't release it because with these 2 jobs... theyre late on their 30 day terms with the other 4 jobs and owed us near $45,000. Got a call from their finance department...and they told us they changed their terms to 60 days instead of 30,so we'd get paid next month.

Well... As you guys know, they're not the ones who set the terms for payment... It'd be us, and they didnt mention it at all. So we knew they were having issues with cash flow... It hurt doing it to someone we always work with, but we told them 2 of the jobs (roughly $15,000) Was past 60 days... once they pay those 2, we'll release the fourth job to them. It's been a month and we havent seen a penny... So we're sitting on $15,000 in merchandise thats pre-printed, painted and ready to go that we cant/wont release until we get payment... And we have no idea when that will happen.

How do you get them to pay? right now it's nearly impossible. It sucks... but theres not much you can do. Covid has changed everything, including the way we accept payments... we keep our 30 day terms with everyone who has had it... but the moment they're late...we call and discuss. We've told a lot of our big accts that if they need longer, thats ok - just let us know.. be honest when we'll get the payment, we understand their vendors are not paying on time as well.... so long as we know whats going on, we can float them. A few have been good... a few have not.

Hopefully your clients pay up eventually, unfortunately it may take a lot of phone calls and nagging to get your payment!
 

GAC05

Active Member
In the current situation, you probably shouldn’t be taking on any jobs without knowing they can pay. At least take a hefty deposit.
We had a couple of large special orders (vehicle equipment) with deposits in process when things turned. Called the customers and offered to cancel their orders with a refund if they didn't think they could pay the balance when the items arrived. Both wanted to continue with the orders. So far so good.
 
One school district was 90 days before they called and said "hey we'll pay this, but..." on the other hand you get those companies that try and set their own terms like "we use a third party and payments are typically 90 days." Okay well you get a late fee since you're on Net 30. "we won't pay it, it's 90 days or nothing." Like wtf.

I had customer we did advertising for do that to us. They finally paid after 120 days but told us they would have to give themselves a 10% discount if they paid with CC right away or we would have to wait for a check.. We'll needless to say, we will do not any work for Campbell soups anymore. They have tried and they don't play by our terms so we said no. Some of these corporations are not worth it.
 
Theres a company we work with a lot. A parking company... Well, we just did 2 big orders for them, to the tune of $15,000 each for 2 different locations. Covid hit.... The government ordered all parking enforcement to stop, including collection of parking at the hospitals... and now they have cash flow issues. They got one of their orders.... but when they were ready for the second we had to tell them we couldn't release it because with these 2 jobs... theyre late on their 30 day terms with the other 4 jobs and owed us near $45,000. Got a call from their finance department...and they told us they changed their terms to 60 days instead of 30,so we'd get paid next month.

Well... As you guys know, they're not the ones who set the terms for payment... It'd be us, and they didnt mention it at all. So we knew they were having issues with cash flow... It hurt doing it to someone we always work with, but we told them 2 of the jobs (roughly $15,000) Was past 60 days... once they pay those 2, we'll release the fourth job to them. It's been a month and we havent seen a penny... So we're sitting on $15,000 in merchandise thats pre-printed, painted and ready to go that we cant/wont release until we get payment... And we have no idea when that will happen.

How do you get them to pay? right now it's nearly impossible. It sucks... but theres not much you can do. Covid has changed everything, including the way we accept payments... we keep our 30 day terms with everyone who has had it... but the moment they're late...we call and discuss. We've told a lot of our big accts that if they need longer, thats ok - just let us know.. be honest when we'll get the payment, we understand their vendors are not paying on time as well.... so long as we know whats going on, we can float them. A few have been good... a few have not.

Hopefully your clients pay up eventually, unfortunately it may take a lot of phone calls and nagging to get your payment!
Look into doing a lien on the property. It's not very nice, but if they are not communicating, you have to survive. We did one about a year ago. We didn't end up even actually doing the lien. A letter from a lawyer threatening to do so got the job done. There's a time frame, like ninety days, so don't wait too long.
 

ikarasu

Active Member
They do close to 150-250k business with us each year - they send a lot of work our way, we were actually pricing out doing all their work across the country since we do it quick and fast for them. It's a big national parking company in Canada, so we dont think they're going to go out of business. Had they have just called us and told us the situation...we could have floated them until they were flush again - Things are starting to open back up this week, so I imagine their cash flow will be better. If they end up not paying for a few more months we likely would have to, so far we havent had to resort to that with any client, and hopefully we never do!

We've seen cash flow problems from our big clients, to our small ones who owe us $300 and refuse to pay until covid goes away... Meanwhile their business is open everyday. People will say or do anything in order to avoid paying their bills...

We're one of the "bigger" guys, we can stand to float some people during this situation, especially if we have a huge relationship with them. Most of our clients are city / government jobs, 90% of our revenue is from contracts for them - so our cash flow has been steady, while a few others arent so lucky. Of course it'd hurt us if we ended up not getting paid the 45K they owe us... but it'd hurt us to damage our relationship more in the long run, so it's a risk we'll take. We wont give them anymore credit since they've defaulted on their terms, but we'll wait it out with them. Hopefully they get back on their feet.
 

E Coloney

New Member
ALWAYS give them a written quote with your T/Cs attached and stipulate whether or not you require payment up front and if you don't, make your terms absolutely clear with a hefty fee for late or going to collection. Signature of acknowledgement required to begin work, either way. Over and over. Good paying customers are fine until they aren't. And eventually you're going to have to eat some anyway.
 

Andy D

Active Member
I had customer we did advertising for do that to us. They finally paid after 120 days but told us they would have to give themselves a 10% discount if they paid with CC right away or we would have to wait for a check.. We'll needless to say, we will do not any work for Campbell soups anymore. They have tried and they don't play by our terms so we said no. Some of these corporations are not worth it.
I worked for a huge sign corporation that never paid before 60 days & I occasionally had to sub-out routing, printing, & other services locally to people I knew and I would always tell them "They always pay their bills, but
not before 60 days, so either don't take the project or price it to where it's worth waiting for payment" I didn't want them calling me up looking for their $$$$.

That's the weird thing about many large companies; there is no way they will pay a deposit up front & they tend to be slow payers, but they don't balk at larger than normal charges.
 

DPD

New Member
The problem is that our industry is all over the place when it comes to costs, deposits, etc. OK, my rant is over.

I have very few customers that pay via purchase order and I don't even go there the first time they work with me. It's check, cash, or credit card for all first time customers. If I do supply credit its on a N30 basis and no more. If a company does N60 I tell them no. This may sound like I'm arrogant but I'm really not. What customers do is to maintain their cash flow. I do the same. Strange, but those that expect to pay never complain. They understand.

I always accept deposits but none of this percentage stuff for me. Estimates are done the old fashioned way and then transferred into my POS. This affords me the luxury of a deposit which covers my costs and if a customer doesn't pay I'm out profit only. I used to do the 40% up front thing but it would drive me nuts chasing customers down. Then I went to 50% and realized that since I work on a 40% GPM its not covering my costs it was time to change yet again.

Lastly, I don't deliver or install a sign until the final payment is received. I send a photo with a request for final payment. Here's why: If a plumber comes to my home and I try to stiff the plumber I have a mechanics lien placed on my property and that really stinks. I can't do that because I'm not a GC. Also, and I'm not sure about this, but once a sign is installed wouldn't it be illegal for me to go on someones property and remove it? As far as I'm concerned if someone stepped on my property and removed something - regardless of contract - its called vandalism and trespassing and that sets up another can of worms.

I send a photo with request for payment and then I either UPS the sign or install the sign.

It works for me so that's all I know. I really don't want to spend time in court and I don't want to enrich my lawyer unnecessarily. I want life and business simple.

- denis
 

visual800

Member
repo the sign. I just did one monday morning at 6am. Customer was no responsive for 2 months, Ill be damned if my textx and phone calls werent going off 3 hours later....amazing isnt it! Im all about repo. people are going to argue on here "its against the law"..."I could be arrested" To each their own but i think for Rona Im might move to payment up front
 

White Haus

Formally known as RJPW..........
We've moved any regularly slow paying customers (or new customers) to prepaid. Given the economic situation it isn't too much of an ask and I haven't heard any complaints.
 

Hero Signs

If they let me make it, they will come
We have sent certified letters with a repo date after 60 days non payment. Bill goes out when job complete and every 2 weeks with a past due stamped on it and emailed also. Once 60 dyas have been hit they have 1 week otherwise we repo, last 9 years only repo one sign. For Texas a clean repo can happen with unpaid invoice as long as you do not enter a building or cut a locked gate. Please check your state laws.
For me every time I help someone I am burnt, unless I have been to your house and know your family and have eaten and drank with you, there is no credit.
repo the sign. I just did one monday morning at 6am. Customer was no responsive for 2 months, Ill be damned if my textx and phone calls werent going off 3 hours later....amazing isnt it! Im all about repo. people are going to argue on here "its against the law"..."I could be arrested" To each their own but i think for Rona Im might move to payment up front
 
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