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Discussion Starter · #1 ·
ive been getting tons of new calls from GC's who need me immediately. All have been problems in multiple ways...late payment being among the issues.....so when it happened again this week I decided to check up on this new remodeler...I talked to an existing sub that I know and looked into my records and found one of his explumbers....they all agreed that late payment was a issue with this builder.....

so I get home today, he accepted my bid and wanted me to start in 3 days......I emailed him back saying no thanks.....told him I checked up on him and found he was a late payer.

he asked who the tattler subs were...then emailed me back and forth 4+ times...finally admitting that he does pay slow.....but now its my fault the job will be delayed ...he offered to pay 1/2 down....

nope!

the GC's may finally figure it out when more subs like me confront them.....of course he thinks its my fault his job will sit for a week....when its his fault for bad business practices finally biting him in the *ss

Fire that GC!
 

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Late payers can be ok if you get a deposit. We usually check with other subs as well as the local lumberyard. Always better to check them out prior to submitting any bids.
 

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I don't understand. You didn't wake up this morning and think to yourself, "if only there was a demanding high standards guy that wanted a deep discount who would pay me when he gets paid that I could work for?"

Why not negotiate it. 75/25 And you'll drop the deposit percentage every time you do a job and he pays as agreed.
 

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I'll check up on your Mamma !! If she wants me to fix a small crack in her kitchen ceiling! G/C or H/O that I don't know?? I call around To see what their story Is.. With me knowing many trades In a large area helps.

But ..Most times that first phone call tells all.
 
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True enough its "buyer' beware out there. Its all part of your contract with someone, regardless of whether its a homeowner or a builder. If you don't have expectations laid out when you start working for someone, then theres bound to be problems.

When you do work as a sub, the principal will generally have to wait for the next draw from the owner after the work is complete. Depending if that draw is scheduled for after your work is done or at some further stage, the money may not be available instantly. In some cases, there may be deficiencies with your work that may cause a delay in payment by the owner also.

In the ideal world for a sub, the GC would just cut him a cheque right of the bat. But how is that fair to the GC, using his line of credit and paying interest out of his pocket? If he doesn't get paid instantly (often 30-60 days) why should you? I've had trades get upset if they find out I marked up their work. So how is a GC supposed to pay you early if he isn't making a markup on your work? And even if he does, then why should that cut into his profit?

Most trades I have worked with have an understanding that working with a GC makes their job easier than dealing with an owner. They may be paid slower than they like, but at least they do get paid, and they don't have to pay a lawyer to collect if the owner refuses to pay.

So a question to you, how late is late here? Are we talking 2 weeks after job is complete or 2 months?
 

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Discussion Starter · #6 ·
In the ideal world for a sub, the GC would just cut him a cheque right of the bat. But how is that fair to the GC, using his line of credit and paying interest out of his pocket? If he doesn't get paid instantly (often 30-60 days) why should you? I've had trades get upset if they find out I marked up their work. So how is a GC supposed to pay you early if he isn't making a markup on your work? And even if he does, then why should that cut into his profit?

Most trades I have worked with have an understanding that working with a GC makes their job easier than dealing with an owner. They may be paid slower than they like, but at least they do get paid, and they don't have to pay a lawyer to collect if the owner refuses to pay.

So a question to you, how late is late here? Are we talking 2 weeks after job is complete or 2 months?

in my world as a sub i HAVE TO pay for my materials/fixtures out of MY POCKET and then wait 30 days to get MY MONEY from the GC.....why is the problem only the GC's???? if i don't pay my suppliers on time i lose my suppliers....but GC's can pay whenever they feel like or when they collect from the homeowner

here's a tip! GC's.....have some $$ in your bank account or get a line of credit....its how its supposed to work.....its how i work with my suppliers ....

i keep tens of thousands sitting around to pay my monthly supplier bill....i swear many(not all) Gc's must have $10 in their bank accounts

another issue is GC's collecting from homeowners....some don't seem to be in any hurry.....and they refuse to pay the subs until they get paid...well if your going to do that, then why not get paid from the homeowner quickly instead of waiting 30 days to invoice them....i invoice every night for work done that day.

im luuuuucky.....all my GC's pay me quickly....im spoiled....very few take as long as 30 days........a new house i just finished paid me in 10 days.
 

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Discussion Starter · #7 ·
in WI you can check the WI court system.....ive used it many times to check up on people...CCAP.com

15 days overdue payments get a prelien filed with a lien company
30 days over due = i call the homeowner
45 days over due = i file the intent to lien

i don't put up with late payments....never lost 1 cent....yet

only had to file intent to lien 2x

never went to lien
 

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in my world as a sub i HAVE TO pay for my materials/fixtures out of MY POCKET and then wait 30 days to get MY MONEY from the GC.....why is the problem only the GC's???? if i don't pay my suppliers on time i lose my suppliers....but GC's can pay whenever they feel like or when they collect from the homeowner

here's a tip! GC's.....have some $$ in your bank account or get a line of credit....its how its supposed to work.....its how i work with my suppliers ....

i keep tens of thousands sitting around to pay my monthly supplier bill....i swear many(not all) Gc's must have $10 in their bank accounts

another issue is GC's collecting from homeowners....some don't seem to be in any hurry.....and they refuse to pay the subs until they get paid...well if your going to do that, then why not get paid from the homeowner quickly instead of waiting 30 days to invoice them....i invoice every night for work done that day.

im luuuuucky.....all my GC's pay me quickly....im spoiled....very few take as long as 30 days........a new house i just finished paid me in 10 days.
It sounds like you run your business professionally and have your act together and I congratulate you on that. Many trades do not, and that is part of the problem.

You hit the nail on the head when you said you invoice every night for work done that day.

I received an invoice from one of my plumbing companies in December, get this, for work done in July. This was for final extras on a new house build. Of course they act like its already waaaay past due. They even went as far as back dating the invoice. Well that didn't work because I referred back to the Dec. 1 statement and it wasn't on there, but Jan. 1 it is, with an August date. So now in December I get to send my client a bill for work done in July that they figure was covered by their final draw... You can imagine how that went over.

It gets better. Another plumber I dealt with never did invoice me for work on a commercial job 3 years ago. I kept asking him for an invoice, because I had prepaid him 50% for some rooftop units and had only received part of that from the owner, and I had done a lot of the prep work with my crew for the in ground plumbing he did. I never did get an invoice, and consequently could never invoice my client as the client needed the invoice and paperwork for warranty. In the meantime, the owner had all sorts of issues with the rooftop units, and no warranty paperwork. Paid out of pocket for a dozen service calls, so now figures its even steven and won't pay anything toward the initial cost. Except, who pays me for my pre payment and time invested and crane rental etc.?

So it works both ways in this business. If you get a GC invoices quickly, then he can get payment quicker from the owner. Its a cycle and the sooner it gets started, the better.

You reference 30 days as being a long time, but in the business world 30 days is on the bottom end. Again, it all goes back to your expectations. If you start a job for someone without discussing payment details ahead of time, then that does leave it wide open to what is expected.

And assuming that GC's don't have lines of credit or money on hand is a misconception for most. Your bill is only one of dozens that he will get each month, don't assume that he doesn't have things set up to pre pay bills. I don't know what kinds of $ you put into your jobs each month, but you can count on the GC's you work for having 10-20X the bills so a hefty bankroll only goes so far sometimes.

If you have the money sitting in the bank, why are you concerned about waiting up to 30 days in the first place?
 

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I agree with huggy on this one. My response is coming from both sides of the isle. If you want to be a GC you need to have the funds to pay your bills. The burden should not be on the sub to carry the GC. They have their bills to pay also. You as the GC entered into a contract with the property owner. You negotiated the terms, it is not the subs problem you entered into a one sided contract.

As a sub I'm currently doing a 150k job, the GC's terms are 30 days from invoice submittal. I do not submit for material not in the shop or on site nor work not completed. All of my suppliers have been paid as have all the subs. Their payments are sent within 24 hours of me receiving their invoice, if they hand deliver their invoice I hand them a check.

The next phase of this job is over 600k, I'll have over 300k out before I receive my first payment.

I'm currently carrying 4 GC's for a little over 90k.

One of the biggest problems with this trade, most do not know how to run a business. If you generated a bill, you best be able to pay it. As a sub, my contract is with the GC, you can be sure if there is a non payment I'm going hard at the GC. I could careless if they did not get paid.

Tom
 

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Some GC's do their best to get away with it and I think its unfair. I include in my contracts that I will pay my sub within 30 days of getting paid by my client and I submit monthly pay reqs.
 

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I def check on all new clients/GCs we work for. It has saved me more than once. I had a GC hire us last year, and after digging up some dirt on him realized he co-owned another waste company in town and was just trying to test us out to see why he has lost accounts to us. I charged him way more than I would anyone else. He tryed to stiff me on the final payment, but I got most of it, and still made more than I normally charge.
 

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I take a different approach as a GC. I schedule progress payments in a fashion that I can make material deposits to every sub as needed, and I almost always pay finals several days in advance of when they are finished.

(Of course only for the ones I know and am confident would never screw me)

My policy is that if it's not my money in my account, I want to get rid of it ASAP.

The result is an entire roster of subs that trust me, and will do anything for me as a GC.

I don't understand the guys who are taking final payments from one job to try to catch up on payments from several new jobs. It's a bad way to do business. But sometimes I am the electrical sub with those guys, and it's a bit un-nerving.:rolleyes:
 

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in my world as a sub i HAVE TO pay for my materials/fixtures out of MY POCKET and then wait 30 days to get MY MONEY from the GC.....why is the problem only the GC's???? if i don't pay my suppliers on time i lose my suppliers....but GC's can pay whenever they feel like or when they collect from the homeowner

here's a tip! GC's.....have some $$ in your bank account or get a line of credit....its how its supposed to work.....its how i work with my suppliers ....

i keep tens of thousands sitting around to pay my monthly supplier bill....i swear many(not all) Gc's must have $10 in their bank accounts

another issue is GC's collecting from homeowners....some don't seem to be in any hurry.....and they refuse to pay the subs until they get paid...well if your going to do that, then why not get paid from the homeowner quickly instead of waiting 30 days to invoice them....i invoice every night for work done that day.

im luuuuucky.....all my GC's pay me quickly....im spoiled....very few take as long as 30 days........a new house i just finished paid me in 10 days.
You bill me Wedensday you get paid Friday. You bill me Thursday, you get paid next Friday. Unless you are a favorite of mine.

3k or 100k. Dont believe me, ill provide references. Never paid A DAY LATE. Ever.

Any GC should be able to do the same.
 

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Some GC's do their best to get away with it and I think its unfair. I include in my contracts that I will pay my sub within 30 days of getting paid by my client and I submit monthly pay reqs.
This is a perfect example of the problem. Why not pay them the day you get paid? The sub is not your bank. What if you don't get paid? Should the sub be out their money? They have no contract with the property owner, it is with you. You should have the ability to pay your subs.

Do you get a deposit for the job? Do you issue deposits to your subs?

I do not do pay when paid contracts. I would not work for you.

Tom
 

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Now that I'm looking for it I've seen that box truck driving around. I wonder who you're working for that you're having these issues.

A lot of the big guys make you wait for at least 30 days. If it's spelt out beforehand, what's the big deal?
 

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GC is the most over used term in the book. 98% are posers.
Yep, same here in Illinois. A handyman can call himself a GC here and be legitimate since there is no licensing for GC's here.

I only started calling myself a GC about 10 years ago when I actually became one since I felt I had earned the title according to the true definition. I made sure before I called myself one and had a bunch of completed full projects under my belt first as a true GC.

Heck, even a HO can call himself a GC here and be legally correct.:censored:
 

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I'm leery of any new cold call GC.

my only thought is this,

who did you not pay and screw and how many beforehand?

if you are established you are loyal to subs.

there may be rare occurrences.

Maybe your sub got greedy and started over pricing ridiculously.

May be they left 1 too many chicken bones on site and HO's complained.

Maybe the work became deficient.

eliminate those 3 deficiencies and you got a dead beat
 

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How can you consider yourself a GC if you don't have the funds to pay your trades?

When I get paid by the client should be irrelevant to any sub, they are working for me and expect to be paid upon completion.

If for any reason there would be any delay in payment or wait on a draw, it should be layed out and agreed upon before any work starts.
 
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