Re: Down Payments?

["Stanley Barthfarkle" <sbarth@xxxxxxxxx>]

Sounds like someone who is running short on cash after an expensive project
and is squeezing his contractors to see if he can save a few bux up front.

What exactly is he objecting to? Being asked for 50% down, or the balance on
completion? On larger projects, I've seen and done 1/3 down, 1/3 halfway , &
1/3 on completion, but only over about $10k. I have had people who wanted to
make "payments", but I always asked the question "would your auto mechanic
service your car and then take 'payments'?" or "does your plumber accept
payments?" the answer was always 'no'.

We get paid when we perform the service. Ongoing service contracts are
another story, but full payment is a must if you want to avoid writing off
large projects, especially if you haven't lined things up to pursue a
mechanic's lein on the property if they default.

When I was in Com'l sales for a large company, whose name rhymes with
'BabyTeeth',  we had to write off most of a $120k project for an internet
backbone provider that went belly up before they even got off the ground
back in '01. They spent like drunken sailors on cutting edge access control,
networked cameras, and a pretty spiffy partitioned security/fire system that
integrated with the access and cameras for a multi-story building with
remote site administration from a location out of state. The landlord of the
building siezed their UPS and computer equipment (to the tune of over a
million $) since they defaulted on a multi-year lease worth several million
bucks, and tried to fight us for ownership of the equipment we hadn't gotten
paid for. (and which they didn't own, of course) The landlord ended up
settling with us for pennies on the dollar, and we lost our ass. In fact, at
one point in 2001, our local SSO (about 15,000 customers) was owed 17
million in uncollected recurring and installation revenue for a 12 month
period- that's when they began to lose patience with non-pays and started
actively pursuing everyone who owed them money from Fortune 500 companies
down to Grandma Smith.




"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!
>
>