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Working For A Huge Company - Getting Paid

 
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Old 05-05-2014, 12:49 PM   #1
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Working For A Huge Company - Getting Paid


I have been doing some work for a huge company. They are one of the largest 50 or so companies in the world I would guess. Them having money and ability to pay is zero concern. Especially the small amounts for the work I do for them relative to the other irons they have in the fire.

Normally I work for mom and pop type places. I either email them an invoice or they just pay me in person when I am done. The amount of red tape I deal with on this big company is mind boggling. Now that I am finally set up in their system they tell me that invoices are paid in 30 days. That is good and fine by me.

The problem I am having is this 30 days doesn't start until my invoice is "approved" Once approved exactly 30 days from that the money gets direct deposited to my account like clockwork. The issue is getting approved. I can do some work and submit and invoice and then it gets hung up in their accounts payable system because the project I was working on didn't have a code activated in their system yet, or the account it was supposed to be billed to didn't have enough funds allocated, or some other minor detail was wrong. It seems every time it is something. Last go round it took nearly thirty days getting my invoice approved.

The guy I deal directly with on the work is great. He tries to help me however he can but even he gets swamped with the red tape. You can't call the accounts payable people and speak to the same person twice.

I would walk away but this company should be providing me about 1 week of work per month and they are paying more than my normal rates. Any tips on dealing with this?

As to a contract we don't even have one. This company is so big they don't sign contracts for any project less than 2 million dollars or something like that.

I have thought of approaching them with the idea of late fees. Basically I want my payment within 45 days of when I submit an invoice or it will cost them a penalty. If payment is delayed because I submitted an invoice improperly that is a different matter but when the delays are due to their internal incompetence that is not my fault.

It sucks that a small company like me is essentially financing a billion dollar company.
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Old 05-05-2014, 01:01 PM   #2
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Re: Working For A Huge Company - Getting Paid


Your invoices are to small to take priority. Either wait so your invoice adds up to some real money or deal with 45 days.

Just to give prospective we did dnr funded project. Payment was 180 days after completing and it was a 3 month project.

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Old 05-05-2014, 01:09 PM   #3
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Re: Working For A Huge Company - Getting Paid


You don't have much of a choice. Either deal with their terms or walk away. They aren't going to change how they do business, right or wrong. They could care less if you walk, there's other guys they have that will gladly take your place, for a while anyway. If you like working for them and the money is good, the best advice I could give is get to know someone in the AP dpt. That way you have a go to person that you build a relationship with. Talk with the PM to see if he can get the ball rolling. He may be motivated so he doesn't need to get those "where's my check" calls, instead the AP person gets them.

I used to be a PM for a very large company. I hated every min of dealing with getting people paid due to our red tape and I'm sure the PM's at this company feel the same way.
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Old 05-05-2014, 01:13 PM   #4
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Re: Working For A Huge Company - Getting Paid


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Your invoices are to small to take priority. Either wait so your invoice adds up to some real money or deal with 45 days.
Unfortunately that is not an option. Per their policy I have to submit a separate invoice for every location we work at. Last job for them was 1 week of work at 4 separate sites so we had to submit 4 invoices.
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Old 05-05-2014, 01:35 PM   #5
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Re: Working For A Huge Company - Getting Paid


I know a contractor in a situation like that and he tripled his rates for the hassle and they pay it without complaint. He got over it.
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Old 05-05-2014, 01:46 PM   #6
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Re: Working For A Huge Company - Getting Paid


Life in the commercial construction lane, nothing new. Have worked for #1 the big "T" under a contract payments progressed better than expected. There are a number of other texas based large ones also, not so good.

If at all possible y'all need to get friendly with one account person. Always ask for them. Find out at all costs who the controller is, pivot person for approvals, get their number use it. You typically need to get known and remembered to be able to expedite your payments. They all have 'barriers' in place to protect the key players from being bothered with small $ inquiries -

Only way, typically very difficult and takes a long period of time to develop. Well worht the effort if it will be a long term relationship, imho
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Old 05-05-2014, 03:01 PM   #7
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Re: Working For A Huge Company - Getting Paid


Theres no way I would walk for 3 mknths work a year, year in year out. If you stick with them and solve their problems they will bring more and more to your table. Take that regular money and save up six months reserves and then you wont be sweating a week of invoices. Once your back is off the wall youll negotiate better deals anyway.
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Old 05-05-2014, 03:09 PM   #8
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Re: Working For A Huge Company - Getting Paid


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Theres no way I would walk for 3 mknths work a year, year in year out. If you stick with them and solve their problems they will bring more and more to your table. Take that regular money and save up six months reserves and then you wont be sweating a week of invoices. Once your back is off the wall youll negotiate better deals anyway.
I guess you are right. We are not really in a cash bind I just always stay on top of my receivables. I do the work as I promise to and I expect my customers to pay as they promise to. It just hacks me off more than anything that when I originally talked to them they said we pay in thirty days and in reality they don't. They pay within 30 days of when they approve your invoice but that may take 30 days in itself.

These people are also very demanding. They want things done now which I guess is the way big business rolls. It makes me mad that they want me to jump through hoops to do the work for them on their time frame and then they drag their feet on the payment.

I have another customer, a small one man operation that sometimes needs stuff in a hurry. When he does he hands me payment in full before I even start. He tells me he needs it in a rush so the least he can do is pay me in a rush.
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Old 05-05-2014, 07:33 PM   #9
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Re: Working For A Huge Company - Getting Paid


There is a ton of red tape in the commercial world especially with the bigger companies. Once you get the process down it gets a little easier and you know exactly what they require.

Usually the Pm's are actually a pretty big part of the process, if they don't do the paperwork in time you don't get paid. They are also usually on a once a month pay schedule, no matter when you get the invoice in it gets paid the same time every month. If you miss the cutoff in one month you don't see a check til the next.

Get to know who the admin. Asst is also they normally handle a lot of the paperwork from all the Pm's and can help you if you can get them to work with you.

Good news is when you get work multiple weeks/months in a row there should always be something in the pipeline.
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Old 05-05-2014, 07:52 PM   #10
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Re: Working For A Huge Company - Getting Paid


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I know a contractor in a situation like that and he tripled his rates for the hassle and they pay it without complaint. He got over it.
Exactly. That's the PITA factor.
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Old 05-05-2014, 07:55 PM   #11
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Re: Working For A Huge Company - Getting Paid


I work for several commercial companies that contract with us small time contractors. If I was paid in 45 days I would be happy.

Key is to have lots of the work in the pipeline.

I do not do any work for less than $60/hour no matter how hard they try to negotiate.
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Old 05-05-2014, 08:05 PM   #12
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Re: Working For A Huge Company - Getting Paid


Mark up for it. Offer a 2% discount if paid on net 7 or 10 terms. See if that is a laxative in the receivables constipation you experience. Get to know the people whom pay you like others said.

Look into lines of credit both business and personal to close the heartburn gap you have. I am a fan of credit unions.
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Old 05-05-2014, 10:17 PM   #13
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Re: Working For A Huge Company - Getting Paid


Roughly 50% of our business is done through similar companies. Some pay on time, every time and some pay net 60-90. I factor that into my price. If you get in good with them, they can keep you busy. Once you are able to float the payments for a few months, It's gravy...

That said, we have worked for over 30 different national maintenance companies. There are good ones and bad ones. We keep a "black list" in our office of companies that we will no longer work for. I would be happy to share that list with anyone who PM's me. I cannot go into detail of why they are on the list but I can give general information.
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Old 05-05-2014, 10:28 PM   #14
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Re: Working For A Huge Company - Getting Paid


Doing work for a big company is what it is....

You submit billing according to their format & wait.

Doesn't matter who you know or what kind of discount you offer.

It's not that they don't care, they just have their ways of doing things and don't get in a hurry...
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Old 05-05-2014, 10:51 PM   #15
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Re: Working For A Huge Company - Getting Paid


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As to a contract we don't even have one. This company is so big they don't sign contracts for any project less than 2 million dollars or something like that.
That I doubt
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Old 05-06-2014, 09:10 AM   #16
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That I doubt
That is what they told me. We have done nearly ten jobs for them so far and no contract.

When we first started I made up the usual contract and sent it to them and they told me the don't sign contracts under either 1 or 2 million I don't remember the exact amount.

They issued me a PO which outlined the scope of the work and we went with that. It is strange I know but that is how they do it.
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Old 05-06-2014, 09:42 AM   #17
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Re: Working For A Huge Company - Getting Paid


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They issued me a PO which outlined the scope of the work and we went with that. It is strange I know but that is how they do it.
A PO is not strange at all. What is strange is the amount they issue them for unless a sub is signing a master contract, outlining the terms. Then the PO references those terms/mater sub agreement.

When I worked for one of the big boys, I used to tell subs all the time, "we suck paying our bills, however unless you screw up badly, it's not a matter of IF you get paid, it's more like WHEN you get paid". The subs that were able to go 45, 60, 90 and sometime 120 days did very well for themselves. However the majority were not able to manage the cash flow and didn't work for us on too many projects. Often times you need to be a better businessman than you need to be a craftsman.
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Old 05-06-2014, 11:01 AM   #18
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Re: Working For A Huge Company - Getting Paid


i thought it was a must to be able to "finance a job" untill paid,
State jobs here pay 90% in 120 days after you bill the job complete, I am in one now of about 15 g's, I will Finish the end of the month and will be paid the 15th of October, and the last 10% after 18 months. and this is a small job.
I pay all the subs 50% on completion, And the rest 30 days billed.
On materials and machinery its usually 60 days billed from the end of the month.
Thats the way it is.
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Old 05-06-2014, 11:33 AM   #19
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Re: Working For A Huge Company - Getting Paid


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i thought it was a must to be able to "finance a job" untill paid,
I have the money to finance the projects. That is not really the problem other than from a planning standpoint. We run our company debt free and have adequate cash reserves but we do this based on a lot of planning.

I guess my whole issue is they told me they would pay in thirty days but in reality they don't. We are not going to go broke waiting on them but if I would have known it was going to take this long beforehand I might have charged more to account for it. Some of these projects have very high costs to us on doing them relative to the amount of profit.

The profit is good based on the time it takes it takes don't misunderstand me but the costs of doing the project are much higher than the profit. As an example we might invoice 30k for a project that took a few days but after expenses we clear 5k. Not bad profit for a few days work but I don't like floating 25k to them for two months especially when we have to pay our suppliers in 30 days.

I was just wondering tips on speeding things up. I have been given some good advice here and will look into trying to foster a relationship with someone is accounts payable that will take care of us.
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Old 05-06-2014, 12:02 PM   #20
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Re: Working For A Huge Company - Getting Paid


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I have the money to finance the projects. That is not really the problem other than from a planning standpoint. We run our company debt free and have adequate cash reserves but we do this based on a lot of planning.

I guess my whole issue is they told me they would pay in thirty days but in reality they don't. We are not going to go broke waiting on them but if I would have known it was going to take this long beforehand I might have charged more to account for it. Some of these projects have very high costs to us on doing them relative to the amount of profit.

The profit is good based on the time it takes it takes don't misunderstand me but the costs of doing the project are much higher than the profit. As an example we might invoice 30k for a project that took a few days but after expenses we clear 5k. Not bad profit for a few days work but I don't like floating 25k to them for two months especially when we have to pay our suppliers in 30 days.

I was just wondering tips on speeding things up. I have been given some good advice here and will look into trying to foster a relationship with someone is accounts payable that will take care of us.
Government contracts in Canada often have the option of being paid by a credit card immediately. They don't advertise this option but it is often available upon request.

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