Anyone Else Have Ca$hflow Vampires?

[Shane Deubell]

We pre-bill all monthly contract work, sent out on 5th due in 30 days.
Regardless date of service or how much.

Always has served us well in managing the cash coming/going every month.
Last 7 years has worked pretty much perfect.

We had a big storm late last year and city was shut down for about month and screwed up almost every business.

Welp, several of these monthlies fell behind or paid very late and only recently got back on routine. The problem is they still are behind 1 month now but are paying on time, just back 1 bill.

So far they are just ignoring me basically and cant really do anything about it.

Guess who is the lucky guy who has had to plug the hole?
Yeah me .

How long should i let this go?
Of course its the biggest buyers too, so i cant just get rid of them.

 

[Desk Jockey]

THAT would suck. I wouldn't go any longer.

Draft a letter explaining what they already know, the storm...etc. Then inform them that you were understanding and let them go as far as you could in hopes of them getting caught up but it has not happened.

Remind them you are only a small business and it has put a hardship on you and will need them to get caught or or at the very least let you know of a plan when you can expect it.

If they come back with a sad sack story you might have to consider dropping those that are unwilling to commit to a payment plan.

 

[Steve Toburen]

THAT would suck. I wouldn't go any longer.

Draft a letter explaining what they already know, the storm...etc...

Uhhhh... good idea, Richard. Except your timing is a bit off since Shane is in (unless my geography is off) yet another really BIG storm!

Professor Steve

PS Shane, on something like this I found a face-to-face visit worked better than phone calls/letters.

 

[Shane Deubell]

Well thats a couple.

Another one went from pre-billing to due on receipt and now has slipped to 30 days.
Cant really complain about that one but still am anyway.

 

[Desk Jockey]

What sucks is when those late payers cause you to get behind.

I had a roofing company drag me out a year before we got our attorney involved. We settled on 16K instead of the 19 due us. Then the attorney took his 3k too.

I've never been prison raped but....I know what it feels like.
(shut up Willy!)

 

[KevinD]

Uhhhh... good idea, Richard. Except your timing is a bit off since Shane is in (unless my geography is off) yet another really BIG storm!

Your geography is a bit off.
This one was a downstate/east coast storm.
Shane is Upstate

 

[jcooper]

The bigger the client the more hoops to jump through to get paid.

I've got a couple national places we do biz with that take up to 3 months to pay. Just have to think of it as a savings plan.

I'd be really careful wording your letter, I would not be standoffish(word?). Heck, just getting the letter to the right person can be tuff w/some of these places. Do you have a specific contact person for this type of issue?

 

[Shane Deubell]

Thanks, this isnt a letter type of situation tho. We talk every month, she is just "slow walking" me for a little while.

Its a trade off, we would need about 300 residential jobs to = this one account.
That would be far bigger PIA then covering for a couple months or whatever.

I'm just mad and crying we had everyone on pre-billing for so long and nobody questioned it.
Honestly will just slowly get them back on track, eventually.

 

[Desk Jockey]

See if she is would allow the monthly invoice plus 10-20% so it will get caught up without taking the big hit all in one month.

 

[dealtimeman]

If it is a fickle or unstable situation I would not rock the boat. As it is not a "if you will get paid" situation, it is a "when you will get paid" situation.

We just use reserves if it get to a certain point, and when the money comes in reset everything.

Don't rock the boat unless your financial situation requires such action.

 

[Desk Jockey]

I agree you are in a precarious situation when you can't or don't want to afford losing the client. However, are they a month behind on all their vendors or have they chosen only to hold you hostage?