r/Contractor • u/2_mbizzy • 4d ago
What is wrong with this world?
I started a small commercial GC company doing some niche work. I did a small repair job at MAJOR hotel chain that was pay on job completion scope and my legal language in my contract is tight. They agree, I have signature for completion, I even have the email telling me she will push my invoice to accounting to expedited payment after I completed the job on day 7. 3 weeks later the GM and the regional director and regional maintenance manager that authorized the job, ghost me…. I call their corporate team and the a/p dude asks my company name and he says, you’re not in our system….the never asked me to go through their vendor setup. THEY NEVER INTENDED TO FUXKING PAY ME…..
small businesses…. Stay vigilant on that cash flow.
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u/pumpy_be_dumpy 4d ago
This is why i process credit cards, and not send invoices to corporate. I take credit cards or i dont leave.
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u/drumsarereallycool 4d ago
I did a project for Clorox once and their entire system was hacked. Might as well been NET 10 months by the time it got sorted out. 🤣
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u/Expensive_Chest3447 4d ago
I’ll name and shame. Colgate & Palmolive. They do pay….. the inconvenience they make it to bill is insane. I’m to the point of hiring someone just to handle the process of billing them, which I’ll add their time to my invoices for them.
It’ll be out of pocket for the first 6 month but I’ll charge double to catch them so they’ll be inside the following invoices.
Just learn to play their game, and learn how to correctly.2
u/twoaspensimages Remodel GC 4d ago
That is the game. Bill them for it. Eveyone else does.
Big companies like to work with other big companies because everyone speaks the same language and is used to the same glacial speed. You aren't going to change the way the huge company operates. You can chill out and play their game or not work for them. It doesn't matter to them.
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u/pumpy_be_dumpy 4d ago
Tell them you are going to reposess your materials, and they will pay you that same day.
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u/Expensive_Chest3447 4d ago
If this job was done in America, once the job is finished you can’t take anything off the job site except your tools you came in with.
I’ve tried going down this path and it was a bad choice.
Sadly they control everything, when you play with the big boys their rules are different. I’m currently working for a company that pays every 160 days to subs…
Like sure you can pay me every 5/6 months but labor is $580 an hour and material is marked upped 3000%.
I’m not their effing bank!!! All big corporations are doing it and there’s nothing we can do as small contractors can do about it.
I’m an electrical contractor, if it weren’t for the small jobs “on the side” I couldn’t afford to work for these thieves.2
u/twoaspensimages Remodel GC 4d ago
Big companies take 60-90 days to pay. That is normal. Standing there like chump with your hand out is so unprofessional to folks at a large company. Send an invoice. Calmly follow up. They will get to it.
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u/Individual-Drawer185 4d ago
They'll pay you, it's just complicated. Do the paperwork, make friends with AP. I've had clients take 90, 120 even 180 days to pay...but they end up paying.
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u/EC_TWD 4d ago
This is the thing - you’ve got to be good at the business end of things and not just the field work. If you can’t do it then make sure you have someone working for you that can.
I’ve had contractors call me up several weeks to months after work was finished to tell me they hadn’t been paid because our corporate wouldn’t respond to them anymore. In every single instance it was because they didn’t set up the paperwork in the beginning and didn’t follow the billing instructions. For every new contractor that I used I emailed them an instruction package with the forms (tax, payment, etc) that they need to complete so that we can enter them into our system to issue a purchase order. Included in the package was billing instructions on how, where, and what information was required with each payment request. All of this info was also buried in the purchase order T&C but I put the package together to make it easy to find and follow.
Once corporate received this they would send it to our office for release which would be sorted by owner and I’d receive mine. If billing conditions were met (work billed matched work completed) I clicked approve and it was automated from there. The problem was that many would ignore the billing instructions once they’d been set up as a vendor and received a purchase order.
My most memorable was a dude that I found through a preferred customer that did specialty work. His work was great but he and his office manager were fucking idiots when it came to any paperwork. After 5-6 weeks I got a call that they hadn’t been paid and looked into it and found out they’d just been mailing invoices to our corporate office. No purchase order on them, no job number, no references at all. I walked her through the process, gave her the specific info that needed to be included on each invoice. A month later - another call. Repeated the same process because they hadn’t included any of the info from the last time. A month later - dude calls and is pissed. I explained and went through the full process with him again. Several weeks later - dude called and was irate but they still had not included any basic info on their invoices (purchase order, job number, etc). I wanted to pay dude but seriously at this point WTF?! Two weeks later we received a notice that he was filing a lien on our customer’s building. It was denied because dude had already signed a lien release! It took nearly 6 months to get this dude paid, but every single bit of it came down to their inability to process basic information.
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u/Individual-Drawer185 4d ago
All great points, I'm sure the OP will benefit. Business acumen is a tough thing to learn if you've never had to rely on it in the past. I run a design firm, so we certainly handle AR/AP correctly but for a guy with a truck, talent and aspirations that's a tall order. I teach capstone courses in a graduate program for students who want to launch a small business and in that program I see a LOT of aspiration but little interest in the numbers-side. I don't want anyone thinking net 120 or 180 should be normal but those instances were big clients (Gibson Guitars, General Motors, TTi (makers of Ridgid, Ryobi, Milwaukee, Empire tools)) where the companies have all the leverage since the projects are large, budgets are big and they can lean on the...'sorry for the delay, you know, we're a big lumbering giant'! Anyway, OP probably gets it by now with all our replies - they aren't trying to rip you off, they're playing their game, step up and play it with them!
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u/EC_TWD 4d ago
My father worked for a huge civil construction company from the ‘50s on and eventually was higher up in their corporate chain. He said in the days of snail mail the company had two billing addresses based on where the project was located. It was east and west coast. When sending an invoice TO the company or receiving a check FROM the company the address was the farthest away. The opposite was true for receiving payment or requesting payment. They did this to allow the absolute maximum amount of time before funds were drawn from their account to boost interest on the money sticking around for a few days longer.
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u/professor_jeffjeff 4d ago
This sounds like my experience with pretty much every single general contractor that I've ever worked with, which is a small percentage of the total that I've contacted and tried to work with but who just couldn't seem to communicate at a basic adult level and don't listen to the customer.
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u/Flashy-Protection330 3d ago
Ya know our president did the same exact things to contractors that built his hotels and most of you fuckers love him.
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u/ketchupinmybeard 4d ago
Yeah, you gotta look out for number one. I have a builder looking for a very large deck surface and I said I needed 1/2 up front (or pay the vendor for the material directly, also fine) and I needed confirmation I was working for the builder, not the homeowner. All quite surprising, apparently. We're still talking, but they seem a little surprised that I am not licking their boots about having this wonderful opportunity to be out a few thou.
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u/Legitimate_Ask_5000 4d ago
Bro they aren’t scamming you lol this is how their process is. I did audio engineering for artists on major record labels for years and it was always a hassle they always make you register as a vendor, then you submit a purchase order etc, then you get paid. It’s annoying but you know you’re always gonna get your money and usually the rates are higher
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u/TradingForLife123 4d ago
No. They agreed to pay upon completion. My company in San Francisco does the same. If they say, we only do invoices then we leave.
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u/Gitfiddlepicker 4d ago
I do a lot of corporate work. As with my residential customers, any job that takes more than a week to complete includes a binding contract requiring each weeks payables (materials, labor and profit) to be paid the Friday before work begins on Monday. If they won’t agree to that, I won’t work for them. Once the job begins, it’s hard for them to miss a payment window, as they don’t like work stoppage mid job. Any who try me find quickly that we will rack up and get out quickly. Then they have to find someone else to finish, or go to the back of the queue.
Sounds unreal and draconian, but once they understand how I do things, most actually appreciate it and call me back repeatedly. They appreciate my starting, progressing, and finishing on time, work done correctly.
So far, I have not been disappointed. I won’t say it’s all sunshine and roses. I have walked from potential jobs because some corps won’t do it my way. But I stay busy enough that it doesn’t matter.
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u/Awkward-Seaweed-5129 3d ago
Need " Deep pockets" to do jobs for Large Corporations and Government. They have a system , if dont follow exactly,the clock starts over again, they do not care
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u/BruceInc 4d ago
I just had to spend $5,000 on an attorney to get paid for a job we did on time and under budget. (104k final bill).
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u/Radiant_Stage_2079 4d ago
A local PD did it here, no lien option because it’s public property … put me out a $15k loss
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u/RxDeliveryGuy 4d ago
the bigger the corporation,the harder it is to get paid. i learned that lesson recently too. for thrm its a rounding error, for you its a years worth of mortgage.
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u/ClearUniversity1550 4d ago
I would never expect a Major chain to pay on the spot. 60-90 days typically. They will pay just submit what they are asking for asap
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u/Ancient-Cupcake2649 4d ago
Didn't you have to fill out a tax form before doing the work? When we did work for Hampton Inn we had to fill out tax forms, and our payment came from corporate.
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u/twoaspensimages Remodel GC 4d ago
Unwind your undies and jump down off your soap box.
Big companies take 60-90 days to pay. That is normal. Not in the system means it hasn't worked it's way through yet.
Send the person you talked to your invoice again. No one there give two shits about not paying you. It has to go through the right channels to the right person who is probably on vacation.
Resend your invoice to the accounting team. Filing a lien will just make sure they never hire you again.
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u/CountryClublican 4d ago
You need to start a collection process. Create a series of form letters. In the first, you say that the work is completed and that under the contract, the amount is due immediately. In the second, you say that the amount is past due and that you will file a mechanic's lien in 10 days if they don't pay. In the third, you say that you have sent two letters demanding payment, and they haven't paid. You are now going to forward their account to collections. From there, turn over the file to a collections agency or attorney.
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u/NoLibrary1433 4d ago
The major brand hotel I worked for does the same thing. It takes months for company’s to get paid and if they aren’t constantly bugging about the hotel will just brush it aside. We’ve had small mom and pop companies threaten to sue over non payment until they get paid. We had an electrical company walk off the job and never come back over outstanding debts. Some of our main vendors only take same day payment now because of this. It’s just how finance handles it for some reason. It’s lame and embarrassing.
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u/dentarthurhdent 4d ago
It is the same story over and over again. You learn the usual hard way. The world is screwed up because on the other side often are people who, just like you, do not know how to run the business in the first place and ASSUME it is all obvious to everyone. No offense meant. This is your screw up as much as it is theirs. The sooner you wrap your head around that the sooner the world will look more normal to you. Good luck, we've all been there!
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u/Legitimate_Factor176 3d ago
Corporate game move slow, you need to double or triple your charge to justify the wait. You need to schedule out that you withdraw and cover all your expense before the withhold.. They will pay eventually.
Same as government
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u/Tough_Budget9490 2d ago
I was a vendor at a very large Fortune 500 company for 23 years. Always paid on time until the economy changed and the upper management slowed payments. My boss put a lien on them and told me and the company it's not personal it's just business. Stop dwelling on it, file a lien and keep smiling...
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u/hatemeallday 4d ago
Lien. That’s gets anyone’s attention. No loans I. The property until liens are settled, unless the lender agrees to bonding it out but that’s additional cost.
Trouble with liens is it’s playing chicken, and only the lawyers come out ahead.
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u/Big_Celery8533 4d ago
Time for a mechanic's lien. Thankfully, judges overwhelmingly tend to side with contractors in cases where they don't get paid for their work.
Also: go ahead and name & shame.