Re: Down Payments?

["Bob La Londe" <usenet@xxxxxxxxxxxxxxxxx>]

"JW" <golf4nospam@xxxxxxxxxxx> wrote in message
news:PKwOe.9697$1g2.8618@xxxxxxxxxxx
> Hi All,
> Our contracts state that we will receive a 50% down payment upon signing
> with the balance billed after completion. Today, a new customer (who
> already signed the contract and sent a large downpayment since it's a big
> job) called very upset about the practice. He said no other vendors
> require it and that it smacks of being a fly-by-nighter. I think it smacks
> of sound money-management... but of course it made me wonder what the norm
> is in the industry so thought I'd ask for some feedback.
>
> Thanks for sharing!


I have only had problems with that from companies who don't want to pay or
want me to carry them.  Usually big multi state companies, and sometimes
from internationals.  I have to admit admit one of my best and fastest
paying clients is an international though.

My contracts say:

Jobs under $5k
1/3 down balance on completion

Jobs $5k or larger
1/3 Down
1/3 Equipment Delivered to Site
Balance upon completion

I also have a clause which specifies a progressive payment schedule based on
percentage of equipment on site and work completed for jobs over $10K or
which may last more than 30 days from start to completion.

Anybody who doesn't want to make a reasonable deposit can get somebody else.
I don't need that kind of headache.

None of the better customers who want quality stuff and are willing to let
me take the time to do everything right have ever had a problem with my
policies.

Every customer who has a problem with my payment policy has been a royal
pain to deal with and to make final collection on completed jobs.

I have a few exceptions for government contracts (city, county, state, fed
etc), but in those cases I will always have a government purchase order in
hand before doing anything.  I bid goverenment jobs based on their historic
speed to pay.  If I know its a 60 day payment schedule I add on enough to
cover the cost of borrowed money plus some aggravation factor for my time.
With that kind of planning and a government purchase order in hand I can
walk into my local bank and borrow money against the purchase order without
any problems for larger stuff ($10K or more).  For smaller stuff I have a
revolving line of credit I can use.

I know some companies have preferred to pay half down and half on completion
.  If its not too big a job I will allow that.

The only time I will do a residential job without a deposit is if its a
quick job for an existing client.  Like a home owner that has had me install
a couple alarms in their stores and now wants one in their home.  If its a
larger job or may string out over months like a new home under construction
I demand a deposit.


--
Bob La Londe

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