i have been in busness for just over a year now, and most of my customers paid me on time .but you always run into some that you cant get them to pay even with your invoice saying {overdue accounts subject to a service charge of 2% per month}.it seems that the people you think will pay dont and the people you think wont do pay.on my quotes now i put at the bottom {any unapproved accounts 50% prepaid}.what is the best way to deal with people that dont pay you,besides small claims court which cost you more just for the lawyer,any info would be appreciated.
Because you're in Canada I can't make any legal points...
But there are such things as bill collectors.
In these terrible times you're going to have deadbeats, too.
If you've got a service business then you should not extend credit, period.
Some local contractors associations offer collection agencies to the members. The agencies get no 'up-front' $$, but get a percentage of what they sucessfully collect. Percentages were 25 to 35%, but may be negotiated.
Quite a few ECs take payment via credit/debit cards on the spot, but there are costs associated with that, and equipment I guess. Getting paid COD style seems the best solution for service type work,
These days credit cards are just an ap on your phone.
It will cost you 2% but you get your money.
You could give a cash discount
Give em 10 days and they pay in 30. 50% to start.(you define start) Balance on finish(you define finish)Small jobs under $x COD or flat rate. Since I'm very small I can be flexible and go with my gut. Ones to watch out for Doctors, lawyers, small retail just to name a few. Just my opinions. Also try to work for good people. Pick your customers don't let them pick you!
thanks for the insight. at least with half down it covers the material, if someone doesnt pay the remainder.
I mostly do small jobs my invoice says please pay technician today ,they see it when they sign to authorize the work
just an aside about mechanics liens here. If the bank forecloses on a property, they get theirs first, anyone else in line gets what's left....
~S~
Sparky...
That's not the law as I understand it....
Bankers HATE mechanics liens because they CAN come first.
All liens are based upon when they are lodged.
First lodged is first paid -- period. (Normally it's the bank's. Hence the name FIRST mortgage.)
Hence, you can't get your property out of escrow until all liens have been cleared. Only then will the bank advance the balance of the funds.
Indeed, that's the whole function of escrow: it makes the lender happy.
A century ago escrow services were unknown. Lawyers handled the matter -- if it was lawyered at all.
Title/ escrow companies are virtually a post-war ( WWII ) development.
Finally 'platted land' made titles clear and secure.
It ALL turned around VA loans and their MASSIVE volume.
VA loans also triggered STANDARDS of construction.
To get a VA insured mortgage the floors had to be hardwood ( circa 1947 ) and of certain dimensions. ( i.e. not closets )
It was the VA that destroyed the market for knob and tube. Romex became VA approved.
FHA only followed the rules/ standards established by the VA.
And who was doing all of the establishing?
General Omar Bradley.
Mr. ROTC.
Mr. Organization.
I'm told ML's are something each state modifies Tesla>
http://en.wikipedia.org/wiki/Mechanic%27s_lien
i'm unsure of any recent foreclosure legislation pertinent to this, but i'll wager who it might have favored
anyways, the GC and I were told this by a local laywer....
~S~
Escrow is also state by state. I have never lived in an escrow state. You get a title search and that comes with insurance (basically O&E for the title company), beyond that off you go. How liens are cleared is also going to be state by state. In some places, you may still be going after the original homeowner, in others you may still standing in line when the money runs out with no recourse.
This is why you really need to ask your attorney what you can do in your area.
But it always boils down to a deeper pockets issue Greg,i've a collection agency akin to the Canadian Mounties @ 49%, and any serious legality i've pursued usually cost me 4 digits just to gain an attorney's attention....
As an aside here, i had an older inspector a while back inform me he wouldn't sign off a final , if i told him the $$$ was tied up
Possibly a small piece of confidence, eh?
~S~
Greg is correct.
A lien is a notice of a claim. To make the claim valid one still must go to court.
However, most lenders HATE liens and during the construction phase the property must be kept lien free because they insist.
If the homeowner has zero equity and loses the house at forclosure you're left with an unsecured claim -- but a claim none the less.
Unlike the mortgage your claim has legs and can follow the debtor.
Again, it means a lawsuit ( small claims ) and judgement. Then the court order becomes of record -- commonly hitting the local small business oriented newspaper.
Ages ago my Dad was Chairman of the Homeowners Association for a planned community. No one was poor. Yet deadbeats ( lawyers, doctors ) abounded. He filed suit against them. Comes Monday morning and these fellows ( lawyers ) are scanning their favorite publication. Lo and behold: their fellow attorneys were hard up for $75 in homeowner dues! Time for a friendly phone call -- Harry may need a hardship loan. Phones were ringing all over town. The checks flowed in pronto.
When your dead beat friend finds that he can't escape the consequences from stiffing you -- a check may indeed come in the mail.
Greg is correct.
A lien is a notice of a claim. To make the claim valid one still must go to court.
One can file a ML for $5 or so, book, page #, at the local town hall
Next, one needs to 'perfect' the claim in court
and that becomes a matter left up to the court
~S~
Unlike the mortgage your claim has legs and can follow the debtor.
yes Tesla
in fact one can register any one judgment against one individual's multiple properties
but the plot can thicken
i've just had my 2nd customer go to jail here in the past few years (can i pick 'em, or what?) , and come to find out they premeditated all their worldly possesions over to their kids in a trust fund
nice , eh? they're getting 3 squares on the inside, i'm still fighting for mine on the outside....
~S~
Maine had the highest proportion of empty housing stock, at 22.8%. Other states with gluts of empty houses included Vermont (20.5%), Florida (17.5%), Arizona (16.3%) and Alaska (15.9%).from>>>
http://money.cnn.com/2011/03/28/real_estate/us_housing_vacancy_rates/index.htmhonest to gawd, it's getting to be like that lame
'life without people' show in some of the gated communities here
~S~
It is really only obvious in the winter time. In the summer most of coastal Florida is "life without people" anyway.
but.... our entire shtick is winter , snow bunnies , fake casts by the fire, etc
~S~
Never let a job payment turn into an unpaid invoice collect the payment on the spot cash cleared approved check or credit card with an approval you are an electrical contractor not a bank
Every service or installation company that comes to my house wants payment up front some even ask for payment before they make the service call
Some electricians are afraid to ask for payment, they may be better off as an employee
Another mistake is working T&M on residential jobs
No customer wants to.have someone doing work for an unknown price
T&M will always create problems when it comes time for payment
Learn how to price all work up front