Deferred Payment on Work done now
- Thread starter onq
- Start date
J
JoeB
Guest
No.. and I wouldn't consider it. I'm not a bank.
But then I do only get a deposit on bigger jobs, and in some cases I have to chase up the money after I'm finished.
I'm getting stricter now..with clauses that the property remains mine until paid for in full, and that the customers agree that I can enter their property to take back goods which have not been paid for in full, as per the pevious clause.
I'm going to start strictly enforcing a payment schedule, of 30%, 40%, and 30% on completion.
I make and fit kitchens by the way.
But then I do only get a deposit on bigger jobs, and in some cases I have to chase up the money after I'm finished.
I'm getting stricter now..with clauses that the property remains mine until paid for in full, and that the customers agree that I can enter their property to take back goods which have not been paid for in full, as per the pevious clause.
I'm going to start strictly enforcing a payment schedule, of 30%, 40%, and 30% on completion.
I make and fit kitchens by the way.
This is the only way to do business, cash is king and it would be a huge risk to opperate on the basis of not expecting payment in a timely manner.
However, if you hand is being forced to do the work and accept drip payments you should seriously consider getting insurance on your debtors. Also consider the need to use a finance facility to cover the working capital of running your business this way.
Yes, I was asked recently to do this on a garage conversion. I essentially priced the project was given the go ahead subject to this set of terms and conditions re payment over 6 months.
I prepared a spreadsheet showing the interest I would charge for financing the project, overdraft +3%, charged monthly on the principle, not outstanding amount, and they very quickly got finance from other sources and I still got the job!
Done and paid for now.
@ Joe, the problem with retention of title is that you can not just reclaim your goods. I discovered this to my loss when I attempted to enfore retention of title clause in a previous project. There was a liquidator involved and basically I could have all my goods once I did not cause material damage to the remaining property. You would find that having supplied and installed a kitchen it becomes material to the property and is thus a fixture.
If you supply goods only, it is much easier to reclaim property. I started invoicing goods separately to materials, ie goods on site, prior to fitting which was invoiced upon installation. That way goods were paid for before becoming a fixture.
I prepared a spreadsheet showing the interest I would charge for financing the project, overdraft +3%, charged monthly on the principle, not outstanding amount, and they very quickly got finance from other sources and I still got the job!
Done and paid for now.
@ Joe, the problem with retention of title is that you can not just reclaim your goods. I discovered this to my loss when I attempted to enfore retention of title clause in a previous project. There was a liquidator involved and basically I could have all my goods once I did not cause material damage to the remaining property. You would find that having supplied and installed a kitchen it becomes material to the property and is thus a fixture.
If you supply goods only, it is much easier to reclaim property. I started invoicing goods separately to materials, ie goods on site, prior to fitting which was invoiced upon installation. That way goods were paid for before becoming a fixture.
J
JoeB
Guest
That's great to know Sconhome, thanks.
There's often some freestanding elements, like island units etc, that I could take back with ease, and re-sell.. it'd mainly be the threat that I'd be interested in. I may now also include a clause that allows for removing 'fixtures'... even if such a clause is illegal they'd still need to go to court to prove that, in the meantime I'd be insisting that they signed up to the conditions...
Virtually all of my business is private, ... I don't like dealing with companies or architects etc.. and would state this, and impose more onerous conditions on them, like payment in full upon delivery.. if they don't like this and moan about it, and basically refuse to invest any trust in me, .. then I consider them a 'problem customer', and am happy to walk away. The point is that if they expect me to trust them to pay me,.. I see no difference in them trusting me to finish the job, after I have demonstrated an ability and a committment, by turning up with custom made cabinets, ready to be installed.
I think it's easier for customers not to pay me, then for me not to finish a job.
By the way, I am actually very easy-going.. and have allowed one or two customers off a bad debt, as I believed them when they pleaded inability to pay. It's the other type of customer, who are on a rip.. I'll be as tough as necessary with them. Some customers owe me money for six months or longer... but I think I'll get it in the end, and I don't see the point in ringing every day.
There's often some freestanding elements, like island units etc, that I could take back with ease, and re-sell.. it'd mainly be the threat that I'd be interested in. I may now also include a clause that allows for removing 'fixtures'... even if such a clause is illegal they'd still need to go to court to prove that, in the meantime I'd be insisting that they signed up to the conditions...
Virtually all of my business is private, ... I don't like dealing with companies or architects etc.. and would state this, and impose more onerous conditions on them, like payment in full upon delivery.. if they don't like this and moan about it, and basically refuse to invest any trust in me, .. then I consider them a 'problem customer', and am happy to walk away. The point is that if they expect me to trust them to pay me,.. I see no difference in them trusting me to finish the job, after I have demonstrated an ability and a committment, by turning up with custom made cabinets, ready to be installed.
I think it's easier for customers not to pay me, then for me not to finish a job.
By the way, I am actually very easy-going.. and have allowed one or two customers off a bad debt, as I believed them when they pleaded inability to pay. It's the other type of customer, who are on a rip.. I'll be as tough as necessary with them. Some customers owe me money for six months or longer... but I think I'll get it in the end, and I don't see the point in ringing every day.
Its great to bump into them in a public space months later, say hi and watch as it dawns on their face who you are!!
Not pushing for an intro into the kitchen market Joe and best of luck with it.
Can I suggest that terms and conditions on the rear of invoices may be one way to go.
Can I also suggest that you should get advice in relation to contract and assumed contract in relation to building in and claims.
ONQ.
Can I suggest that terms and conditions on the rear of invoices may be one way to go.
Can I also suggest that you should get advice in relation to contract and assumed contract in relation to building in and claims.
ONQ.