I am the owner of an electrical service co. who's primary work is commercial and industrial. We did a small job for a very large business last year, which entailed dissassembly of a very large switchgear and xfmr. This co. was a subsidary of an even larger co. based in another state.
Terms of our billing are 30 days with exceptions to some business' which will only pay 90 or even 120 days. That is decided in the contract agreement! We bill promptly with the Due Date listed plainly on the invoice. This particular co. paid us two mos. late. We generally do not contact our attorney unless it looks like payment is definatly not going to be made or we need to have scare tactic. At any rate, the co. filed for Chptr 7 bankruptcy 89 days after they paid us. According to the judicial laws for bankruptcy and payment made with in 90 days the the file date is considered "Preferential Payment" and we/you the business is required by law to pay it back!!!
You business owner need to take this very seriously, you may not beleive me. If you have an attorney consult w/them, if not get one. Any business owner needs one anyway.
What we should have done, according to our attorney, is sent out a "Mechanics Lean" after the thirty day period which would have protected us from this suit. (we are being sued for the money). Now we all know you cannot send "liens" to clients when they do not pay on time, or we wouldn't have any clients. Construction contractors are the heart of this country. Our small business' make help make our strong economy. Yet we are screwd, I think more than any other kind of business. Co's and people alike feel if they do not want, they do not have to pay! We have to stop this. Voting is one of the ways. A collegue of mine, owns a sprinkler co in Vorhees, NJ. He is getting a group of people together and working on a plan to help contractors set a "standard" for payment amongst other things. For more info contact Dean Scarpa, at Alpha Sprinkler. I will give his email on the next post.
