Not so cool story brah.. Had to call out one of our longtime clients last night and today for failing to pay us. This is a guy we are subcontracting to, he owes us a fair amount of money and has been dragging his heels paying us. He generally uses the argument that he pays us when he gets paid but this year he's only paid us for about two out of the dozen projects we have worked on for him and has been taking him months to pay us. Anyway two days ago he said he was going to get us a check for one of the projects that has been completed but for the next two days he doesn't mention anything about it or produce a check. Last night he sends an email saying he needs some changes to a drawing done that night and needs some more help this morning for a midday meeting today. I respond asking him where is the check he promised the day before and that we aren't going to do anything until we get that check. He responds that he will get it to us and will tape it to the front door of his office (not unusual for him to do). My partner goes over there, keep in mind this is about 10PM at night, and there is no check. I call him on it and this morning he says it is out there. I go and get it. In good faith I actually did the work he asked me to do last night but didn't send him the drawings until after I got the check. After this I let him know I can still help him this morning but send another email letting him know that the payment situation with him is untenable and that if we don't see progress we aren't going to help him anymore. Plus if he isn't getting paid promptly by his clients he has a bigger problem than just owing us. I haven't heard anything from him since even though he said he needed help for a meeting, also we still have a couple of active projects with him. I feel bad because this is a guy we have worked with for years and done some very interesting projects with but he has been bad about paying us and now is worse than ever. Not expecting any advice on this just venting to the internet since at the moment I am stuck waiting to see if he still needs help, if he is going to pay up more or what.
Man, I don't think I'd ever do sub work based on them getting paid. There's a reason why he's getting a big cut of the pay... he has to take the risk (in addition to finding the customer, etc). At most I'd do 90 day NET.
Yeah, that's my point. He gets a big cut because he has to take the risk of his customer not paying him on time. But he has to pay you on the time for it to be worthwhile to you.
I know the feeling. Anytime you're in an industry where you're dealing with contractors of any sort, getting paid can always be an adventure. I have one in particular who routinely ignores the documents he signs (which clearly spell out the payment terms). He was previously a very good customer...lots of orders, timely payments...but lately has turned into one of the worst (very few orders, late on every invoice by more than 90 days, gets pissy every time we ask to pay up). The best piece of business advice I was ever given was this... Life is too short to do business with a**holes. That includes those who are otherwise decent people...but don't pay their bills. They end up costing you more money in the end than you'll make on them.
I work for a small energy services company as the accounting/finance rep, so I see this kind of situation all the time.. whether it is money we owe, or money owed to us. We have several business units, but the company as a whole works on a cash basis (no debt/borrowed money). I have learned that it can be tough working on a cash flow basis. The money has to come in from clients to pay the money owed to vendors/suppliers. Sometimes **** happens with clients and they don't pay when they are expected to. This can throw off planning and sometimes leads to misallocation of payments/investment. So sometimes we have to delay payment to vendors and suppliers due to the inability of our clients to pay on time. While it is not entirely our fault, you almost have to apply this risk going forward. Leads to conservative planning... which could lead to paying people right up to the submittal deadline or a bit beyond it due to the risk of not getting paid on time. I get emails every now and again (during such times) from suppliers asking for overdue payment... And the client receives the same treatment from us. While late payment is not always intentional, it usually seems that way. Cool story bro / my 2 cents.
No, architecture. A lot of our work is as subcontractor or consultant to others in the field. In this particular case we do a lot of the technical drafting and code compliance checks for this client. This client doesn't like to deal with technical matters so we pretty much take over projects for him once it gets beyond the schematic design state.
Sorry I don't like to reveal financial info and since my actual name is known by several on this site I can't do that.
