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  1. #21
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    I got one of those letters from a customer and it pissed me off big time, but they are normally smaller fairly high return jobs so them paying slow is not going to cause me major problems. I had to turn off my emotional response and think business wise. My customer was already paying on 60-90 days so it really didn`t make a difference. They already paid a higher hourly rate due to them paying slow wanting rush service all the time and the jobs not being particularly big. I must admit the temptation to send back a snarky email was high.

    $3000 a year I assume it is not one bill per year. Is a $1000 invoice being a little late going to make that much difference to your cashflow. Sounds like it is lucrative work, if you start being belligerent about it they might be forced to start shopping around and they are likely to find someone who has no idea what you are charging for the work and will end up doing it for half what you are charging.

    Your contact at the company is stuck in the middle between you and the accounting dept. If you have to raise your prices 2% which it tons with current interest rates that's not a big deal for him or her, its easier than looking for someone else to do what you are doing. If you start asking for treatment different from all their other suppliers, the internal hassles could make it easier to just find a new supplier.

  2. #22
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    For companies of any size, Net 60 seems to be the norm anymore.

    As a supplier in a highly-competitive business, you either play the Net 60 game, or your competition gets the business.

    We have all the blue-suit prick MBA's running the show at these big companies to thank...

    My small shop has grown accustomed to the 60-day bullshit, which is often 75+ when the check hits the mailbox.

    But to be honest, I would rather work for a large, stable company that insists on Net 60 terms, rather than smaller outfits that pay in 30 --- but who are more likely to have financial or bankruptcy issues down the road...and thus jerk you around with payments.

  3. #23
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    Quote Originally Posted by Fal Grunt View Post
    How do you handle charge backs?
    with a baseball bat.

    Actually, I've never had one.

  4. #24
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    Quote Originally Posted by Larry Dickman View Post
    with a baseball bat.

    Actually, I've never had one.
    Chargebacks are a real fucker. Some people know how to play that game exquisitely well and there is no possible way you can win. Visa is like 6 months. Discover is fucking end of time. Those cocksuckers will do a chargeback years after.

    I used to do pretty high margin work where the customer had to take some risks and there were often multiple parties involved. My stuff would get the blame from one of the other parties and customer would think that chargeback thing was just insurance for them or they were just shitty people and I'd take it in the wallet.

    Understand that chargebacks do not need a good reason nor any proof whatsoever for the customer to win.

    I'd rather take a check a year late than a surprise chargeback 18 months after you delivered.

  5. #25
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    Chargebacks ???
    So the money in your bankaccount isnt yours anyway ??
    Glad that is not possible over here But hey we dont work with cheques anymore

    Peter

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    Quote Originally Posted by cnctoolcat View Post
    MBA's running the show at these big companies
    Seems they are out to screw everyone below themselves on the food chain to justify their existence.
    This is the cost of sending every other fuckwit to college. Some of them graduated! I fear the trend is picking up speed. Excess middle management everywhere. Maybe the next downturn will thin the herd.

  7. #27
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    I worked for a major company that pulled that "extend the payment" garbage several times. It allowed the (redacted) that ran the purchasing department to claim big savings each time. Until critical suppliers (other large corporations) decided they wouldn't play the game, and refused our orders. We ended up getting critical items through a third party with an extra week or two delay, and a 25% increase in price. But the (redacted) still got his bonuses and our budget had to absorb the cost increase.

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  9. #28
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    Quote Originally Posted by Peter from Holland View Post
    Chargebacks ???
    So the money in your bankaccount isnt yours anyway ??
    Glad that is not possible over here But hey we dont work with cheques anymore

    Peter
    He's talking about credit cards, not checks.

  10. #29
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    I'm a retired commercial / industrial photographer. My first client when I opened a business here in 1967 was a paper company. My terms were Net 10 days, for 25 years they spent about $10,000 a year and paid in 10 days. 10K in 1967 is $76,689.52 in 2019. I took very good care of them, and I was treated decently and paid on time.

    In the late 70s or early 80s was sent to photograph a workshop for accounts payable given by the big company that owned the mill at the time. The instructions were on the Net 30 accounts with interest added after, write and date the check on day 29, put in envelope and run through postage meter 3 - 4 days later, actually put in mail 3 - 4 days after that. Reason for all this BS was that the company cash was kept in an interest bearing account and the longer they held the $$ the more interest accumulated.

    The vendors were partially bankrolling the company. If you float millions of $$ it can add up.

    Paul

  11. #30
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    Third party with NYCTA if you want to get paid faster...even 1/4% can work.
    That said...No, I'll wait just the same. thanks.

    As its small amounts large companies will often find it easier to pay by CC. For that reason I have a smart phone app now to take CC. Much better then having to buy or rent a machine, have a service. Small jobs under 2500, I just tack the lost % onto the job. EZ CC makes these guys happy as its ezier to hand over a CC then write up PO's and requested, process payment, reciept of payment. Just hand card and the papertrail is done.

  12. #31
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    If I was an accounting or procurement manager and anyone that worked for me proposed increasing terms or requiring mor money up from I'd lose my cool.

    These moves are only made by scum of the earth humans that lack creativity to provide true cost savings. These people will slow your organization's growth for short term gains.

    I'm not interested in one time savings that ultimately stresses the value stream. I'm interested in real savings.

  13. #32
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    Has anyone actually charged a slow paying customer an interest penalty and actually collected on it?

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  15. #33
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    It seems that the MFG world and the maintenance/repair world must be quite different.
    I have had a few very large customers ( fortune 100 ) companies that have their own terms worst is bills received 1-31 of the month prior are paid 25th of the month following so some invoices billed the first of the month get close to 60 days but invoice billed the 31st is paid in 26 days. Most pay invoices 30 days from the date of the invoice.
    One of the large oil companies tried the 90+ day payment after one of their converting plants was down for 4 days because we would not deliver a repaired part until all past due bills were paid in full. I lost that customer but It was the best move I ever made, all customers paid all their bills on time after that. Word travels very quick.
    McDonald's doesn't give you a big Mac unless you pay for it, you the customer don't dictate your terms to them.

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  17. #34
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    Quote Originally Posted by moonlight machine View Post
    The work I do for them is easy, for me anyway. I earned 163.00 / hr on what I did today. It is piece work, so it varies a bit. So it amounts to about 3000.00 / year for me. They will never go COD so maybe it is time to fire this customer.
    Maybe your thinking about this wrong.
    It's EASY welding that you charge $163 an hour for, and at the end of the year it amounts to about $3000.

    As long as 'one way or another' you're $3000 ahead in easy profit at the end of the year, maybe you shouldn't really be too concerned when the money gets put into your checking account.
    Or, maybe if you bump up the prices to around $175 or $200 an hour, it'll ease your pain a bit.

    In this day and age I'm not sure how easy it is to find easy work that you can charge $163 an hour for. Another thought would be to fire this customer, and then go try to find another new customer with similar 'easy' work, that pays around $163 an hour, and they also pay that in 30 or 40 days, or sooner.

  18. #35
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    When I first set up the shop, the machinist who maintained the letter sorting machine at Monsanto's world headquarters retired form his regular job and left the area, so he gave me his fixtures and a quick seminar. It wasn't the career I had I mind but it was a regular income. At that time, Monsanto had a pay immediately box on the form and they would batch those checks through the week and pay them on Monday. Eventually they replaced the machine but until then we got along very well.

    The other large company I dealt with was GE. They had a similar system and I was payed at a reasonable time. Then two things happened- we went through the super interest Carter years and Jack Welch took over GE. Payment got slower and slower, a constant battle. I think a large part of the problem was that each department was graded on their profit without regard to how much they helped or hindered another one. If one division made parts at a low profit and sold them to another department which made a huge profit on them, there was no consideration for the overall gain. Some of the results were surreal. The Erie locomotive factory would charge the shop I was dealing with (owned by GE) list price for parts but would only pay the wholesale price when the assembly was sold back to them. They deserve the problems that came later.

    The lady who handled my paper could not even get a phone number for her boss. All communication had to be email. That did have some interesting ramifications. One time one of my problems was relayed through a number of hands and the return email had all the entries left on it. She sent the whole thing to me. My favorite entry was "Fred, this is a code red. Vendor has threatened to suspend services."

    Bill

  19. #36
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    Ive tried a 2% pre tax discount for COD.
    Initially, it worked well with smaller startups.

    Eventually, they all end up between 45-60 day. Seems the 2% discount from competitive rates isnt important enough.

    Maybe my post 30 needs to go from 5% to 25% to open some eyes. But then there'd be hurt feelings.
    Why should I finance your business cheaper than Visa?

    Cash flow is crucial, especially when youre a one man show.

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  21. #37
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    Company we worked for did a huge communications project as a subontractor to national aerospace company for large city and it was an out to bid thing.

    Boss needed to make the quote as low as possible as the other company was already doing same project for nearby large city so understanding large companies pay late (he once drove desk in large company) the proposal had milestone payment schedules as well as discounts for rapid payment.

    It was rather penalty for late payment as the bid was based on full price and payment discount does to impact bid.

    But pricing based on early payment allowed price to be reduced to point we got the bid.

    Client was well aware of this and approved before quote submitted.

    Many companies pay late as they do not want to lose control of their money until last minute.

    Submitting quote with discount for early payment does not work as the item cost is just that, a fixed line item cost and applying a discount creates MORE WORK as there is money not budgeted.

    However, charging a penalty for late payment can work as the same example above except now someone needs to explain how the cost has increased.

    Language needs to be clear and obvious, signature approving quote agrees to terms of payment.



    Sent from my SAMSUNG-SM-G930A using Tapatalk


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