You must be in Houston

This is why i get paid upfront for the cost of ALL equipment before I even place the order. I collect labor and tax before I leave the residence on my last visit. What's odd is I have never had a customer blink when I present my terms. If they went to Best Buy (merely an example) for a geeksquad install- they would pay the whole bill before they left. in 18 years I have never had to make a collection call.

this

ONLY my commercial clients get net 15 or 30 terms since that is how they pay out. i learned the hardway early in the business that you need to have as much up front as possible.

I cannot fathom you guys offering terms to residential clients and why, your just asking for a situation like this. The only time ive extended terms to clients is when they have an accountant/book keeper for their property and run it like a "business" even then ive received checks within 10days,sometimes on the spot.

Leaving alot of money on the table after you leave just gives them a way to say "well we have it" and we have more money then the AV guy and it is highly doubtful he will sick a lawyer on us, and if they do my lawyer gets paid $600 an hour.

Up front on all components... You can battle it out over the labor - but cash on the barrelhead for the gear!

Used to work for a high end botique shop, that did custome. We extended terms and before we knew it we had over $500,000 in overdue account receivables! AND it was a BITCH to collect! Nightmare!

A builder friend of mine did a deck addition and installed (and supplied and installed a hot-tub)...

...After several months and missed appointments to settle up the bill, promises made and broken - my friend took his crew and trucks to the guy's house and ripped the deck off the house and yanked the hot-tub!

Guys,
I don't disagree with those who collect all upfront. But, one of the ways I've built our company here is not having to collect upfront. If contractor A shows up and wants $20k and I go behind and demand nothing, we get a very high close rate there. It's just worked for us. I'd say 1 in 200 projects have payment issues.

Payment upon completion has been our m.o. And it has definitely garnered trust and clients.

Good luck to you man. It's great it has worked, but I would fear that big job that comes along and refuses to pay. You could be there next to Hifi House. I've had a client give less than the required amount in our contract, and I let it go. The stress that resulted after he left a healthy chunk of money on the table for a good month before we got him to pay up was unbelievable. I could not run this business and live my life wondering if I'm gonna get paid for 100% of a job.

And not collecting is not set in stone either. If it's a larger project, say $30K and up, we do collect draws or phase payments. The above is more true with clients that have not been recommended to us. i.e.- we don't know them.

Seems like the typical client response when avoiding payment is:

"If you'll come by and do _____, I'll pay you then."



Which leads to a perfect opportunity to remove a, vital to the system, piece of equipment the "needs" repaired, and take it with you. :-)

I would watch out in a programming class a few years ago. I was told that is digital trespassing. In some states that don't have a digital trespassing laws. You would be charged as if you walked in to his house thru an unlocked door. What I have heard the only way to do what you did and not get it trouble is to start the download and crash the download some how like turning off your laptop half way thru. Because when the control company looked thru the logs it wouldn't be able to tell.

This is all for fun because on a fourm we would never talk about how to do something illeagal.

So you are saying clients you do not know or have not been referred to you, you do NOT collect a deposit. This is backwards. I REALLY hope you don't get bit in the ass in the future.

No, i was trying to convey the opposite. If we don't know you, there is a deposit.

Phew. You had me worried

We have a clause in our contract that essentially states "until payment is received in full all software is in 60-day demo mode"

On our Crestron based jobs where we don't have a prior working relationship with the client, or if we feel dubious about a client, then once we are happy we are complete and we hand over, we start a timer in the program. After 60 days a message pops up to say "demo mode expired,please call your dealer to licence this system" This function is in the program from the outset, so we have not hacked in or digitally trespassed in order to break a clients system.

When we receive payment we log in remotely to disable the timer, or we can give a code over the phone that does the same. If we receive payment within this time frame then the client never knows it was there.

We take deposit up front to carry out design documentation for issue to site for other contractors, full payment for equipment immediately prior to ordering, and stage payments for labour and programming. We never leave more than 10% of the labour cost on the table at completion, which we then give 30 days credit terms on. This is a feel-good sum for the client who then feels secure that we will attend to sort out any niggles he may find with the system. 30 days is enough time for the client to discover anything they may not be happy with. At 30 days we ask for payment if it has not already been received. At 45 days we remind them of the demo mode clause, and at 60 if they have not paid the system stops working.

At this point they own all of the hardware, but don't have the functionality of the system. This a reasonably powerful position for us.

Only once have we ever got to the 60 day point, and when the system shut down they called and paid immediately without complaint.

Smaller non-Crestron system jobs are not so easy to police this way as there is often not a way to code this functionality, but the sums involved are significantly smaller, and again it is only 10% of the labour bill outstanding. These jobs typically settle this on handover anyway. Worst case and we can't get them to pay then we decline all labour warranty works (unless the reason for non payment is a genuine warranty issue) until the bill is settled.

If a project scope is presented to the client before any work commences, are the terms NOT included? If not, it's the fault of the dealer who neglected this and was too much of a doormat to not ask for payment upon completion. If the client tells the dealer that they won't be there when the project is completed, the payment options should be discussed at that time. If it's a new client, I can't see NOT expecting payment immediately unless a previous client referred you to them and/or the amount isn't significant enough to warrant worrying about it. Anything in the four-figures and above is enough to worry about but if it's multiple jobs with an unpaid balance, it's just as dangerous- excessive accounts receivables can kill a company faster than almost anything else.