I have been in business for 7 years and recently switched from housecleaning to commercial cleaning. I have a major company but they always seem to be behind on payables. The bill first goes to the local office and is then faxed to Texas and then to me. They are currently 2 months behind in payment.
The local office is tired of dealing with me and the Texas office is getting upset with me as well.
The question is, do I suspend services and take a chance at losing the contract or is this something that is common with larger corporations. In the beginning they were alwats on time within 2-3 days of billing. I am very frustrated!
Thank you
Top2Bottom Cleaning
Stephanie McCabe
Yes stop services.......Or at least say you are going to stop services is not paid in a timely manner. Also have you tried offering a discount if paid within 10days? Many companies would be glad to pay you quicker if you offered a 2-5% discount if paid promptly. Is this a National Company??
Stephanie
Never be afraid to ask for your mony. If you are providing good service, per your agreement. Figure out what your profit was going to be when you started the contract and figure what it is now, after not receiving payment. Ask yourself:
WHY DO I WANT TO WORK FOR FREE?
WHAT HAPPENS IF THE CANCEL THE SERVICE AND OWE ME TWO-THREE MONTHS?
If they get upset with you for asking for payment, what have you lost?
Ron
www.seguraassociates.com
Yes, this is a National Company. I Thank you for posting to the reply. I was very frustrated. I am going to add the discount idea to the new contract. I am also going to add suspension of services if not paid within an agreeable time frame. I have employees that have to be paid .When companies are that far behind, I have to pay them from my paycheck. OUCH.....
Hi. I am dealing too with a natioal Co. When you sign your Contract/service agreement look at the fine print. They usally pay net30 to 60 days. I have found that more and more are putting these nets in the agreement.
OH the longest I had to wait is 75 days. and yes I had to pay my employees too. It hurst and S_ _KS
Dwayne,
It is in the contract that they are to pay 30 days behind but it had gotten a bit excessive. They were running an additional 30-60 beyond that. It was increasingly frustrating going through the chain of commands to call this person, fax this here or email this person. As of last month (fingers crossed) they were current. I have taken the advice that several of you have given. It has been of great help. I simply changed my contract to let them know service would be suspended. We are in a rural area and I know times are hard everywhere, I just was not sure where to draw the line. None of my other accounts have ever been within a week late. In fact, a couple of them pay early from time to time. I knew I needed to change things but did not know the proper course of action.
Thanks so much to everyone for your advice.!!
2/15 works great for us. Your running with the big dogs. Try to learn their rules of doing business.
The BIG companies I deal with have a structured purchasing / payment disbursement accounting system in place via an assigned PO for cleaning services. Ask their corporate purchasing dept if you can get payment under that type of AP system.
A topic like this gets me going! This started happening with one of our accounts after two years of service. First it went to 45 days, then 60 days. If I called them or stopped by when an invoice was out 60 days, they would pay that day. This went on for a year. The fourth year was even slower. I finally had to give them a thirty day cancellation and refused to buy supplies. They owed for 4 months so I had to threaten small claims court. Finally they paid up three months after we ended services.
Maybe you have already done this. Since this keeps happening, instead of calling about a payment, ask for a meeting face to face and discuss the payment procedure. What can the two of you do to resolve this issue that works best for both? Don't come across as desperate or afraid. Try to agree at the meeting to give them a week or two to pay current then suspend services. If you can't agree and as a last resort, I would be apt to send a letter registered reciept stating because of lack of payment you will terminate the contract after 30 days and require payment in full or you will proceed in the courts. You won't make money if you loose the account but you can loose money if you keep it! Especially if you have to pay interest for supplies or from your line of credit for payroll. You can't finance their janitorial services!
Near the end of our walk through for a bid, I ask about the billing and accounts payable process. Depending on the answer, I might add a caveat in the bid for a discount if paid within 10 days or charge the interest I would have to pay for supplies, if the account is paid after 30 days. Most have been proud to say they pay within thirty days or even fifteen days. If it is normal for a company to pay within fifteen days, then I won't offer a discount. On larger accounts, I'll ask if we can bill up front on the 1st and 16th of each month. That way we are not waiting as long to cover payroll. Ask about wire transfers from their bank. Our largest account asked us to switch to wire transfer payments and we receive it within two days of billing.
There were some previously good responses. Hopefully this is resolved by now!
Good Luck,
Joe
You can do several things to expediate payment. We bill at the beginning of the month. We will bill November 25th for December service. We may not get paid by everyone in ten days but several pay early. if it's a big account bill twice a month or bill weekly. Some times you may even get companies to pay faster by offering a discount. 1 or 2 % if they will pay faster. Learn you clients payable habits. Email your invoices. See if your clients will pay via direct deposit to you. All of these save a few days on both ends. More of the managers that sign off on the bills really like to see the emailed invoice and they get it out of their inbox. Paper invoices tend to sit. Finally explain that you're not a bank. With labor, taxes, insurance you're already carrying them.
Thank you everyone for the helpful comments as I believe we are here to support one another.
In reply to one of the comments, It does not matter who you "run" with. Everyone needs support and has questions from time to time. I do believe that is part of running a successful business. That is also why I am part of Cleanlink. We can learn from each other's experiences and help others with knowledge they may not have yet.
Start Invoicing a month in advance.
or
Ask for your status to change on their vendor list. A lot of times cleaning companies get grouped in the vendor pile of payables, but in reality our services should be paid just like an electric or gas bill. This being said, your invoices don't need a approval and probably can be process at the location you operate.
Some thoughts
Brad
Donley Services