What? You Want to Get Paid for the Work You Do? Make Sure You’re Getting Paid Within Your Negotiated Terms

By Paul Bieber

Doing business entails risks. Some risks, like weather problems or zoning issues, are out of your control. Getting paid within the terms of your negotiated purchase order should be an ordinary part of your day. “Should be” is the phrase that gets my attention, and hopefully yours. You have the ability to control this by following some basic guidelines.

Know who you are dealing with on any transaction over $1,000. Ask new customers to fill out your “New Customer Information Sheet,” which used to be called a credit application. Use this to put them on your mailing list and to check their credit references. Ask for their legal and DBA names, the bank they deal with, the full names, addresses and phone numbers of the principles and where they presently buy their glass and metal. Include
a checklist of all the services you provide and ask them to mark the services they are interested in.

If the job is over $10,000 ask for a personal guaranty if selling to a corporation. Not all customers will do this, but it doesn’t hurt to ask. Work with your attorney for the proper letter to use in the states in which you do business.

Be Clear

Make sure your terms of payment are clearly written on the job order your customer signs. If the terms are just in fine print on the back, they mean nothing. Have them in bold print near the point where your customer signs. If you deposit checks at the bank, make copies of all checks you receive. This allows you to see where they bank and who really is allowed to send money to you.

Let’s say your terms are full payment in 30 days. A gentle phone call on day 25 is a nice touch. But when you don’t have the check by day 35 make a more serious call asking for a check or a credit card. Do it now. Don’t wait until 40 or 50 days to get into your customer’s head.

At 60 days, it’s time to pay a personal visit to the customer. Remind them that warranties do not begin until the job is paid in full. (This also should be on your customer job sheet that is signed at order time.) If you have that personal guaranty, now is the time to mention possible use of that with the person who signed it.

Stand Your Ground

If your customer’s job is a long one, lasting a month or more, put in a provision for weekly payments through the job so your labor and materials are covered. If you are due a check every Friday for the previous week’s work, and by the following Tuesday you are not paid, pull your workers from the job. Your client should get that message very quickly that you are serious in getting what you deserve.

At 60 days, don’t be timid in asking for what you’re due. In many states you can lien a job many months after the completion date. In some, you have to prelien to protect your rights. Ask your attorney what the laws are in the states you cover. If the job is greater than 5% of your annual sales, be sure of the credit you are granting.

Credit is an important part of your business. If you are too strict, you get less business. If you are too loose, you go out of business. Watch this closely, with a once-a-week summary from your bookkeeper including the results of phone calls or contacts and decide where you need to step in.

Paul Bieber has more than 40 years’ experience in the glass industry, with C.R. Laurence and as executive vice president of Floral Glass in New York. He is now the principal of Bieber Consulting Group LLC and can be reached at paulbaseball@msn.com. Read his blog on Tuesdays at http://usgpaul.usglassmag.com

To view the laid-in version of this article in our digital edition, CLICK HERE.