How Do You Bill Small Commercial Jobs?

TigerFan

We're doing a small commercial space buildout for a franchisee of a national chain - project is just under $50k.

This is our 4th or 5th commercial job, but the others have all been for friends/family, so billing terms were whatever we decided.

How do you all bill out a typical commercial project like this?

What about larger commercial projects, say up to $500k and up to $1M?

Thanks in advance!

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http://www.bayoucontracting.com

19kevin56

On commercial work it's customary to bill on a percent completion basis each month. The forms most used are AIA G702 with the G703 continuation sheet.

Regards

TigerFan

This job will take less than a month - would we complete the whole job and bill for it at the end? Or would 50-50 be ok? What about 30-70? or 70-30?

Does anyone here pull credit on commercial customers before starting the jobs?

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rbsremodeling

The billing terms are usually spelled out in the bid package. Did they supply that?

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TigerFan

There's not a bid package. We were contacted by the franchisee from an ad - we met onsite and discussed scope of work. We have returned a written scope of work and price for the job and expect to land it in a week.

So it will be a negotiated payment schedule - I'm just looking for what is acceptable generally for light commercial work.

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Mud Master

Two ways to go about this in your situation...

1. Pay upon completion of each trade. EX: Framing is $8,000.00, when the inspection is complete on framing, you would recieve $8,000.00, and so forth. For this you would need to deliver line item pricing to the client.

2. Percentage requisitions, which is most common. Usually 15% upon delivery of Materials, 35% upon sanding of drywall, 40% upon completion of flooring, leaving 10% held over til' punch-out & client approval & sign off of project. I would use this method personally.

Honestly though, I can't imagine that a national business does not have it's own procurement officer & guidlines set up for construction, or a bid package on what items are to be installed in thier store. We did a bunch of Boscov's & they have specific items such as cabinetry, gondola's, etc..that they used in all thier stores, and had national accounts set up with distributors we had to purchase from. Most National chains all have this set up. Something about the lack of paperwork & systems on thier part would make me weary.

Also, as Kevin said, AIA forms are customary on commercial projects between GC's & Subcontractors.

FWIW, I work for some large GC's & Restoration Contractors & ALL follow AIA & the percentage method of payment.

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TigerFan

I think we'll do #2 and follow an AIA schedule.

Again, we're not dealing with the national chain - it's a local business that is a franchisee opening this store.

They are providing all of the store components - counters, displays, wall and floor coverings and materials, cabinetry and built-ins etc.

We are doing some partition framing, electrical, plumbing, drop ceiling and installing all of the store-specific stuff that they are providin

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Double-A

Hmm, you might reconsider... I don't have a problem with 50/50, but most times prefer to see it broken up more.

Something like a one month job might go 10% scheduling, 40% at first material drop, 40% at trim/finish stage, 10% at signed completion.

I hate to leave 50% for one payment (especially the last one). Folks just tend to get nutty sometimes towards the end and stuff happens. Its much easier to negotiate 10% off of 10% than 10% off of 50%.

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"My clients’ wishes are the center of my attention." -- David Guido, a contractor in Woodstock, N.Y.
New York Times, July 20, 2006

jdpaint

where can a person find out more about the AIA forms ? thanks

RPortinga

the American Institute of Architects is at aia.org - and there is also consensusdocs.org - the DOCS is for Designers, Owners, Contractors and Subcontractors.

Both have "metered" programs where you set up an account with a base dollar amount that buys so many "credits". Each document is worth so many credits, and you buy X points for Y dollars. When you print a final copy, it takes the credits from your account. They also offer annual (much larger) subscriptions for unlimited use.

AIA documents are definitely weighted towards the architect. I haven't used Consensus, but have been reading a bit about it, their goal is to be more even handed. Not sure how they do as you don't seem to be able to view the documents without buying some credits or something first.

AIA I believe also sells paper copies through distributors, I think I read that C-DOCS does not.

One issue I have with both services is they require windows, even to the documents are .DOC or .XLS format... and unless you pay extra on the AIA side your document creation is tied to a specific computer, and if that computer goes down... or you set it up in one office and you want to work on a contract at home... well, you can't. I can't speak to the C-DOCS stuff, but in this "mobile" age, the AIA software has always seemed to be a few generations behind the times.

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Rob Portinga - Bauer Bros. Construction, Inc.
Design/Build - General Contractor - Construction Management

jdpaint

thanks for the quick response