Contractors getting paid

Cyle · Jul 18, 2018

Is anyone else finding it to be a nightmare collecting on invoices lately? This year has by far been the worst i've ever dealt with. I'm use to collecting a check within a week of completion, which is expected and reasonable to me, now it seems like i'm lucky if i'm paid in 2 weeks. Many jobs i'm waiting 45 to sometimes 90 days. Anyone from big generals to owner builders, small builders, etc it doesn't seem to matter. They expect you to finance them. I'd say maybe 20% of the time payment is within a week lately.

Getting dahm tempted to get on with a big builder who pays regularly so at least you know when they pay, i'm so fawking sick of chasing people down for money. Before this year i've never had to lien, already done it 2 times, and likely will be doing another right away here.

It's really a piss off to work your a$$ off and be broke because you have over $100k in outstanding invoices.

Anyone have any tips or tricks? My estimates state payment is due upon completion, however people don't seem to notice or care. Many seem to think it's normal to have 30 days to pay because it's "industry standard", even when it's never brought up before the work is done. I'm thinking of chunking my work into smaller portions and getting paid as each is done (generally a 4-6 week break part way through), and refusing to return unless previous is paid, that way at least i'm not into them for so much money.

freeflorider · Jul 18, 2018

Yep, usually we see 60to 90 days as a norm. 30 days work then 30+ on top to pay. It’s a heck of a struggle because I like to pay crew and creditors as I go or at least as the bills come.
Being 2 months into a mill that could say sorry were broke scares the hell out of me but what options does one have. I’m glad I only have one to deal with, as you guys need to chase 10-20 guys.
hells angles are good collectors but I’m thinking if you went that root people may stop hiring you and your return may only be penny’s on the dollar.
hang in there!

Cyle · Jul 18, 2018

freeflorider said:
Yep, usually we see 60to 90 days as a norm. 30 days work then 30+ on top to pay. It’s a heck of a struggle because I like to pay crew and creditors as I go or at least as the bills come.
Being 2 months into a mill that could say sorry were broke scares the hell out of me but what options does one have. I’m glad I only have one to deal with, as you guys need to chase 10-20 guys.
hells angles are good collectors but I’m thinking if you went that root people may stop hiring you and your return may only be penny’s on the dollar.
hang in there!

Yea in a way chasing down 10 people is worse then 1, but it's also nice to not have all eggs in one basket. You guess is close, 9 people i'm chasing for money right now. I try to keep subs and suppliers happy, but it's impossible with how long some are taking.

Hell's Angel's would be perfect for one! I'd say 50% or more of the people/companies i'd never work for again everyone thinks they are a home builder right now. Thankfully work is plentiful, but tough when you're not getting paid.

Tried commercial with a general thinking they'd stick to their terms which depending on when you invoice is 30-60 days, but nope, ended up being 20 days late on that. Funny when the sup's on site say they go through trades like no tomorrow and say many leave because payment is slow, but they don't clue in and fix the problem. And too late when you find out after you've started. At least I get some satisfaction knowing i'm leaving them high and dry and in a bind. But wondering if the rest of my money will become even later.

gunner3006 · Jul 18, 2018

How I’ve been doing it for the last year is just stating the obvious. When the job is complete you pay me the agreed price. I had a lawyer do me up a payment agreement and the customer signs it before the job is started. They have 7 days to pay then it goes off to collections. Collections takes there half and I get mine but in the end at least Ive shown that I’m not pissing around. If nothing else it scares them. A lien works as well but collections affects credit and people hate that. I would also like to add that I do this with building generals as well. In my field I deal with new generals all the time that don’t work out of Alberta. It’s surprising how many non-bonded jobs the generals skip paying the contractors. Commercial is a little different than resi but I do feel your pain. If you have wholesalers and employees or contractors to pay it adds to the stress. To the point where you wonder if it’s even worth it all. Our boy Trudeau isn’t helping things on the tax side either for small businesses.

sledn · Jul 18, 2018

In most residential projects, I get paid within 30 days . Smaller builders have 30 days max ,larger ones 30 days from the end of the month. Never had to fight for my money in the past 30 years because I only work for contractors I know.No private or cash jobs, as they are nothing but headaches.

gibsons · Jul 18, 2018

Nothing out of the norm to wait 90+ days out hear. And we are talking in the $100k's or more

armymags1 · Jul 18, 2018

We wait that long and there also is a 10% holdback for a year on most of our contracts

Cyle · Jul 18, 2018

gunner3006 said:
How I’ve been doing it for the last year is just stating the obvious. When the job is complete you pay me the agreed price. I had a lawyer do me up a payment agreement and the customer signs it before the job is started. They have 7 days to pay then it goes off to collections. Collections takes there half and I get mine but in the end at least Ive shown that I’m not pissing around. If nothing else it scares them. A lien works as well but collections affects credit and people hate that. I would also like to add that I do this with building generals as well. In my field I deal with new generals all the time that don’t work out of Alberta. It’s surprising how many non-bonded jobs the generals skip paying the contractors. Commercial is a little different than resi but I do feel your pain. If you have wholesalers and employees or contractors to pay it adds to the stress. To the point where you wonder if it’s even worth it all. Our boy Trudeau isn’t helping things on the tax side either for small businesses.

That is a interesting way to go, I wonder how many people would react though? I am guessing many wouldn't like that. If you're working for someone private I could see collections working, but if they operate under a company I don't think many would care.

I have good terms with some subs which is 30 days past end of month, or some are straight 30 days, but when i'm paying those terms before i'm paid i'm not a happy camper. Especially when there's one supplier I don't have any payment terms, and fuel is a huge expense of mine which is no account either.

Cyle · Jul 18, 2018

sledn said:
In most residential projects, I get paid within 30 days . Smaller builders have 30 days max ,larger ones 30 days from the end of the month. Never had to fight for my money in the past 30 years because I only work for contractors I know.No private or cash jobs, as they are nothing but headaches.

That would be nice. I'd say about half of my work is for owner builders. Some are fantastic, but many have no idea what they are doing and expect all crazy chit. With that long of payment terms you shouldn't need to. However one fairly big general right now it's 30 days past end of month, was suppose to be paid july 1st, it came today. So work I did early may just getting paid for now. Ridiculous. Ontop of that it's 10% holdback until end of project, which is like a year.

Cyle · Jul 18, 2018

gibsons said:
Nothing out of the norm to wait 90+ days out hear. And we are talking in the $100k's or more

There is no way i'd do that. Except for the one general I lien at 40 days, no exceptions. If you let lien period expire, you loose so much leverage to getting paid.

Cyle · Jul 18, 2018

armymags1 said:
We wait that long and there also is a 10% holdback for a year on most of our contracts

Yea the 10% is BS, especially when they want to hold it until end of project. If it's just 45 days since last day worked, that's fine. But not beyond that. I make it very clear in those cases I raise my price 10% so basically i'm getting my money and the 10% is just a bonus later, if they don't like it they can find someone else.

Tchetek · Jul 18, 2018

I’m in the same boat. Last 9 month or year have been different for sure.

I’m in the commercial and light industrial and have had a small steady customer base. I’ve been thinking I’m doing twice as much volume to make the same buck. And everyone is slower to pay. The ones that payed in 2 weeks now are paying in a month. The one that were 30 days now 60. The ones that were 60 now 90-120 or paid when they feel like it.

The bigger the company the slower they are.

I’ve had to cut off service to 2 of my bigger good customers and give them ultimatums to pay up before we come back in the last 6 months. Gamble if they will pay or just move on to a new contractor and fawk ya over.

maxwell · Jul 19, 2018

Pretty standard stuff unfortunately. like mentioned working for the owner of the project directly you should be able to get paid faster. However any general contractor will likely be 30 days++ some of the biggest construction companies in north america that i deal with are 45+ and we know that going into it. it states right in their payment terms net 45 days. my business is lucky enough to do enough in direct credit/debit every day to float the business and allow us to wait on these much much larger invoices to the big generals. which ALWAYS come but its a struggle every time.

to your other point. i would agree over the last 2 years we have seen our receivables climb to nearly double in the 30+ day department. i used to have a lady that would do office administration and make collection calls when she had spare time. Now i have 2 full time positions making reminder phone calls, tracking down companies that keep dissapearing/changing names, filing liens, and building small claims court cases. its brutal. We end up writing off many of our smaller invoices as these companies we do work for just fall off the map. small developers, one time home builders etc etc. so i am going to have to come up with someway to credit check or take 50% down on smaller projects because currently we are either writing them off, or spending more time and effort collecting them than they are worth.

Ronaha · Jul 19, 2018

Well I'm one of those home owners that pays instantly, I appreciate all the hard work and talent,Canada has some of the best tradesmen and skilled labor worldwide,it helps that I only hire on recommendations or people I know too.

rsaint · Jul 19, 2018

I have been lucky not to have to chase invoices but I get 50% minimum up front and ones that cannot or won't I move on and let someone else fight to get paid. All my dealings are with home owners thou and rarely work outside that bubble.

nast70 · Jul 19, 2018

We took a 30% deposit on all our middle sized residential jobs and new commercial clients. That now applies to all customers across the board. If it smells funny, we'll ask for 50% just in case. We are still playing banker on a hotel job in GP, $80,000 worth of product sitting here taking up space (since December) while he figures out how to pay us. Problem was, he has ordered from us several times in the past, we trusted him, had no issues. It happens.

Tchetek · Jul 19, 2018

^^^. Ya nobody is giving me money up front in the commercial/industrial world.

Cyle · Jul 19, 2018

maxwell said:
Pretty standard stuff unfortunately. like mentioned working for the owner of the project directly you should be able to get paid faster. However any general contractor will likely be 30 days++ some of the biggest construction companies in north america that i deal with are 45+ and we know that going into it. it states right in their payment terms net 45 days. my business is lucky enough to do enough in direct credit/debit every day to float the business and allow us to wait on these much much larger invoices to the big generals. which ALWAYS come but its a struggle every time.

to your other point. i would agree over the last 2 years we have seen our receivables climb to nearly double in the 30+ day department. i used to have a lady that would do office administration and make collection calls when she had spare time. Now i have 2 full time positions making reminder phone calls, tracking down companies that keep dissapearing/changing names, filing liens, and building small claims court cases. its brutal. We end up writing off many of our smaller invoices as these companies we do work for just fall off the map. small developers, one time home builders etc etc. so i am going to have to come up with someway to credit check or take 50% down on smaller projects because currently we are either writing them off, or spending more time and effort collecting them than they are worth.

Hagen surveys right? I'm surprised how many of the plot plans are coming from you guys now. See more then any of the others by far, hear pricing is better. Yea when it's a smaller amount it's hard to justify chasing the money, compared to the point of it. An average invoice for me is about $7k though so it makes sense. I'm chasing down one for $3k right now I let my lien period expire and contemplating court, if not for the money just the point of not letting them get away with it. Lesson learned though, the $15 is so well worth it, not a guarantee to get paid but helps a lot.

Cyle · Jul 19, 2018

Tchetek said:
^^^. Ya nobody is giving me money up front in the commercial/industrial world.

Agreed. The general I emailed the other day saying i'm no longer willing to do anymore work unless I get some sort of assurance future invoices will be on time pretty much told me to not expect the rest of my payments to be on time, thinks i'm trying to run away with the money. When the work is done 30-60 days before I see a dime, if it's on time but more like 80+ days in reality

Funny part is i'm the 6th person they've had doing the same thing in the last roughly 2 years. The site sup said some of the others left for the same reason, sick of waiting to get paid. No idea how they don't clue in people expect to be paid on time.

gunner3006 · Jul 20, 2018

We went to a bid meeting last fall for a job north of grande prairie. The General was there and handed out pre bid packages. I was skimming over it while we were waiting for the rest of the possible contractors to arrive. When I got to the payment terms I busted out laughing. A 20% bond and they were holding back 10% for 365 days. One full year. I asked the general if they understood that he was just costing his client an extra 10%. It’s not easy handling warranty or deficiencies I get it but that’s getting a little out of hand.

Contractors getting paid

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