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    7 Replies Latest reply on Aug 25, 2008 1:31 PM by CleanNClean

    Getting paid

    CleanNClean Newbie
      I am a new small business of 1 year. I have one customer. Last year I grossed 100,000. over a 4 month period.
      Problem is, they have outstanding payables of 35,000.00 60 days deliquent. When asked about payment I get nothing but the run around and excues. Oh, we will get funding on Friday, not sure when we will get funding, you will get paid when we get funding.

      Meanwhile I am incurring late fees, overdraft fees, deliquent payrol taxes.
      Missing out on interest. , and am pennylist.

      Help!
      ,

        • Re: Getting paid
          LUCKIEST Guide
          Getting paid, YES everybody should get paid.

          Tell us more. Who are you?? Where are You?? What kind of a Business??

          Do you have a Lawyer?? Now is the time to talk to your lawyer.

          LUCKIEST
            • Re: Getting paid
              CleanNClean Newbie
              I am in the San Diego area. I offer janitorial and housekeeping services to commercial facilities.

              Currently I cater to one client because their business is sufficient.

              I am in the process of obtaining a lawyer for the business in general. Right now I have a paralegal advisor.

              I did receive a partial payment last week. I don't think it is their intention to not pay, just hold out as long as they can.

               

              Thanks, everyone, for your responses.
              .
            • Re: Getting paid
              amspcs Ranger
              Dear Clean,

              I feel your pain. I was in the small business consulting business many years ago, and here is the advise I gave then, which still applies today.

              Unfortunately, that's the way a lot of people do business these days. Your client may or may not be preparing to 'stick you'--I hope you took the trouble to check out a D & B or some sort of credit history on this client to get an idea of their bill paying habits and capability BEFORE you extended them credit in this amount.

              Most probably, what is happening is this: They are simply using YOUR money as cash flow instead of their own. The use of your money is free for as long as they can get away with using it without remitting it to you--=if they used THEIR money from their line of credit or whatever, obvoiusly that would not be free. That's just the way a lot of businesses do business these days, sad but true, look out for #1 and the heck with the other guy.

              A third strong possibility is they are going through with THEIR receivables what you are going thorugh with your receivables (them). Their invoices aren't being paid, which means they don't have the money to pay you.

              Regardless of which is the case, it's their problem, not yours.

              Here is your most obvious solution (assuming #1 above is not true and you will get paid sooner or later): You know all those expenses you mentioned that you are incurring as a result of their not paying you...late fees, overdraft fees, on and on? Well, if this is the way they are going to pay you, then when you compute your overhead factor (the math you do when you figure you how much to charge for your services) you need to consider these expenses exactly in the same manner as you consider any other normal business overhead such as rent, tax, office expense, etc. In other words, you can't pretend these expenses don't exist when you figure how much to charge if they really do---you wouldn't not figure your rent when you compute how much to charge, would you? These expenses are nothing more than ordinary overhead in the course of doing business, and when you compute your fees you need to compute enough to cover ALL overhead expenses. Please tell me you understand what 'overhead factor' is and you did utilize it in figuring out how much to charge. If you didn't, study up on the concept immediatly--I don't think it's possible to be in business (REAL business, as opposed to pretend business) these days without having a firm grasp of this concept.

              Of course, another solution is to set up credit card processing capability and insist that if they want to extend out their payments, they are welcome to do so with their credit card company,not with you. Their credit card company is in the revolving credit business, you are not. I know this is difficult to say to a customer, but sometimes it HAS to be said. Othrwise, if they don't pay you, they're not really a 'good customer', are they?

              Hope this helps. And I sincerely hope you get this issue resolved quickly as it sounds like these folks are on the verge of shuttering your business.

              AMSPCS
              amspcs@juno.com
              www.MerchantServices-help.com
              • Re: Getting paid
                Lighthouse24 Ranger
                You don't mention who the customer contact is that's giving you the run-around. Is it a services contact in a vertical support department, or is it the accounts payable manager?

                If it's your regular point of contact for providing services, then it is possible that he/she is not sending your invoices over to the accounting folks for payment. For instance, maybe he/she under-budgeted for fuel costs (like almost everyone else), and is now holding your invoices to help offset that. If you think that might be the case, contact the Accounts Payable manager and politely explain that payment is overdue and are inquiring to see if something was "lost" in the process.

                I had a client that was taking an average 88 days to pay because of a situation like that (my contact was holding invoices to manipulate his budget). When I made that call, the AP manager and GM were absolutely livid. For them, it was important that the company have an exceptional credit rating and be known for paying its bills promptly. My contact apparently got quite a lecture from his boss and his boss's boss. The next year, invoices were paid (on average) within 12 days.

                This may or may not be applicable to your case -- but perhaps it will help someone sometime. Good luck.
                • Re: Getting paid
                  Milleisen Scout

                  While it's great that you have such a large client, this is a great example of why it's important to diversify your client base. If your client knows that they are your one and only client, you have little leverage with them and perhaps they know that. The titans of business are known for making life hard on their suppliers. Companies like Wal-Mart and McDonalds pay when they want, knowing full well that their supplier has no choice but to shutup and wait for payment.

                  Until this client isn't the only one who puts money in your pocket, you don't want to push too hard. After all, late money is better than no money.