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I Just Put CN RAIL on COD....

Started by Percy, December 01, 2018, 01:00:46 PM

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Percy

For those of you who deal with large corporate customers who have poor payment practises, how do you cope?? I cut crossing planks for these guys who always need them "yesterday". I have to drop whatever I am doing to service these guys and then it takes upwards of 60 days to "approve" the invoice and once that is done, they will pay you "early" for a discount... :D :D :D.... talking to their accounts payable people is like wiping your butt with a spinning wheel(sorry admin). I am probably committing supplier suicide with CN but the headache is not worth the reward,.... There!!! I vented...woke up cranky ;D ;D ;D
GOLDEN RULE : The guy with the gold, makes the rules.

richhiway

Never minded how long it takes to get paid when you know they are good for it. 
Woodmizer LT 40
New Holland 35 hp tractor
Stihl Chainsaws
Ford 340 Backhoe

Hilltop366

I did some small reno jobs for a now defunct department store, it took forever to to get paid the first time so the second time they called I refused to go unless they paid me in cash, they said it can't be done......a few days later it could be done!

Apparently no one else wanted to work for them either.

Resonator

When I drove truck in the oil fields a few years ago, there were big companies that only paid out at 30, 60, 90 or more days after billing. My boss said it was better to work for a company that paid sooner, and make less, than be left waiting. Luckily I was paid every two weeks no matter what. I also heard horror stories of accountants who were in charge of multi million dollar payrolls who would skip town with $$$$$$$. 
Under bark there's boards and beams, somewhere in between.
Cuttin' while its green, through a steady sawdust stream.
I'm chasing the sawdust dream.

Proud owner of a Wood-Mizer 2017 LT28G19

DMcCoy

Been down that road myself.  Owner going on guided fishing trips in Alaska while the AP dept told me they had to make payroll so I would have to wait.

I got them current and put them COD.  They eventually quit buying from me.

They filed bankruptcy 2 years later.

Just another business story.  Some businesses will treat you just as bad as you will let them.  It is really quite simple, you get what ever you are not willing to walk away from.  I walked and never looked back.  

The customer is NOT always right.  You should get rid of your worst customers annually as they are taking time away from your 'wining and dining' your best customers.  Think it over - what do your best customers need that they are not getting, supply that.
My 2 cents.

Bradm

Quote from: richhiway on December 01, 2018, 01:07:47 PM
Never minded how long it takes to get paid when you know they are good for it.
Unfortunately, this method of thinking is a big part of the problem.  Business schools teach taking, not asking for, an interest free loan from your vendors by pushing out payment on invoices.  Many of these companies also run large amounts of debt and when there is a large, general economic slowdown they pass off their burden on to small vendors, forcing the small vendor to go bankrupt to maintain their own cash position.  Very poor method of managing a business.

All of my customers are on net 30 from invoice date.  Some pay immediately; others you can set your watch by.  One plays games (cut a cheque inside 30-45 days and late it season in the office for 2 more months) and are considered a "meh" customer at best rather than a great customer.

I had a customer withhold payment for 6 months and they expected me to jump whenever they called.  Ended up putting them on delivery hold for 12 hours (less than that actually), they missed a 4 car rail shipment and the order.  For some reason it was my fault they didn't want to pay.  Sure it was only about $1200 of labour (if I had material costs in there I wouldn't have waited as long) but at $100 per invoice every other week it starts to add up.  I put them on COD, cash only, the same time as delivery hold.  I was told not to come back.  6 months later they were bankrupt and under new ownership.

With all that said, I have no problem waiting to get paid, if at all, when I know the other person is having serious troubles from outside factors (no drugs, gambling, etc.).

Southside

Had one last summer that I had to do the same thing with, had been stretching me out longer and longer he called one day wanting a big order he had placed with me as his due date was getting close. I told him as soon as he got his invoices up to the agreed upon terms I would saw his order. He had a complete meltdown on the phone and at one point began to cry. 

He got caught up, placed a couple more orders and then stopped coming around. Good enough, he always wanted a discount and wanted product yesterday. He probably is playing the same game with another supplier now. 

There is a reason customers start to stretch you out, and it's not for your own benefit. 
Franklin buncher and skidder
JD Processor
Woodmizer LT Super 70 and LT35 sawmill, KD250 kiln, BMS 250 sharpener and setter
Riehl Edger
Woodmaster 725 and 4000 planner and moulder
Enough cows to ensure there is no spare time.
White Oak Meadows

barbender

I've never seen any good come out of working with companies that make you wait to get paid. No thanks👎
Too many irons in the fire

terrifictimbersllc

I have some customers who ask me to hold their checks awhile.  I know they're good for it.  

On the other hand I won't schedule another job with one of them until I can cash the previous check.  Just saying .  That seems to work, they seem to understand that they 1) are embarrassed to  ask me to hold 2 checks and 2) want me to come back again sooner rather than later.   

So the bill gets paid sooner rather than later. 

DJ Hoover, Terrific Timbers LLC,  Mystic CT Woodmizer Million Board Foot Club member. 2019 LT70 Super Wide 55 Yanmar,  LogRite fetching arch, WM BMS250 sharpener/BMT250 setter.  2001 F350 7.3L PSD 6 spd manual ZF 4x4 Crew Cab Long Bed

DPatton

Percy's reasoning for the venting is extremely valid. At my full time job we consistently deal with anywhere from 45-90 day turn around times on our monthly pay draws. Often this number is in the millions on a monthly basis. Meaning we have to keep a large working capital balance available at all times. But that's just the norm in the commercial construction industry. 

 I'm glad to see most of you that have posted so far either can't or won't work with those type of delayed payouts. Southside Logger and others are right on this one, they are just using your money as their own personal monthly loan program. 

 Hilltop's story is a good example and likely what I would try in that circumstance. He managed to maintain the customer and get paid, but it doesn't always work out that way. Sometimes you just gotta recognize it and walk away from a bad deal.
 
TimberKing 1600, 30' gooseneck trailer, Chevy HD2500, Echo Chainsaw, 60" Logrite.

Work isn't so bad when you enjoy what your doing.
D & S Sawmill Services

Don P

I built for one real estate development company early on. They wanted to modify the contract to read that I would be paid when the house sold or 30 days after completion whichever was first. I agreed. Then I found out that my rights to file claim expired... 30 days after last work done. Nice guys. The secretary who we befriended took care of us luckily but it took awhile. They went under.

Another big outfit stretched out well beyond the contracted terms and then claimed they didn't pay on those terms. When I've been late paying them they haven't been understanding atall... ain't working for them again, they're doomed. They can build their own national park buildings.

WV Sawmiller

   I have only had one customer who did not pay at the end of the job and he gave me over half and said he'd send the rest in 10-12 days when he got his pay check, which he did. I would not have minded if he had just told me that up front but was a little ticked off to find out he was short after I had finished.

   I remember when I was in USMC we had one small local vendor who provided pallets. He was set up on a contract such that he could come draw his pay as soon as he could show a delivery ticket to our finance guys which he did immediately after delivery. He was on a short cash flow situation no doubt paid his help daily in cash and had to have his money right away. So based on that experience even government agencies can pay quickly if you just set up the agreement that way up front. They needed his pallets and he could dictate terms acceptable to him.

   This reminds me as I mentioned in another thread I had a man deliver logs to me yesterday. First time we had met. He demanded his pay before we unloaded the first log which put him in charge as no way we could reload them if I refused.

   The best negotiator I ever met was in Cameroon, west Africa. We hired a local villager to take us in his boat up the river in the jungle to a pygmy village. We agreed to pay at the end of the trip (My guide set that up - I did not care as I am a trusting soul) and we all agreed. He took us upriver a couple hours, we got out and visited the village then came back while he stayed with the boat. The boat captain said he needed his money before we got back in. I laughed then as he held all the cards. I paid and he took us on back. We were certainly in no position to stiff him or try to negotiate a better price.
Howard Green
WM LT35HDG25(2015) , 2011 4WD F150 Ford Lariat PU, Kawasaki 650 ATV, Stihl 440 Chainsaw, homemade logging arch (w/custom built rear log dolly), JD 750 w/4' wide Bushhog brand FEL

Dad always said "You can shear a sheep a bunch of times but you can only skin him once

Dave Shepard

Just heard my father say this tonight "Behind every fortune is an exploitation ". 

Pay upon completion, or go away now.
Wood-Mizer LT40HDD51-WR Wireless, Kubota L48, Honda Rincon 650, TJ208 G-S, and a 60"LogRite!

Magicman

Of course I don't sell but only saw so my situation is a bit different.  This month I will complete my 16th year of sawing and I have never not been paid.  Not the first time.  Matter of fact, my customer today slipped me a $100 tip.  Most tips fall into the $25-$50 range.  The largest tip that I have ever gotten was $180.
Knothole Sawmill, LLC     '98 Wood-Mizer LT40SuperHydraulic   WM Million BF Club Member   WM Pro Sawyer Network

It's Weird being the Same Age as Old People

Never allow your "need" to make money to exceed your "desire" to provide quality service.....The Magicman

moodnacreek

This is the worst part of having your own business. I tell those starting out; you have to learn to do the service or product properly, deliver [ or make ready for fob] and the worst part, get paid. When I saw for N.Y.S. , I never know where it's going but you will get paid some day unless somebody lost something.  With the municipalities: In most every case the first time you bill them they ignore it. You have to know that they will be back for more wood [ you make this happen] and if enough time has passed [since you billed them and didn't get paid] you refuse to supply the wood until paid for the first order. This has always embarrassed them into following through like they should have. Instead of concentrating on your work you have to play games.

barbender

WV, those guys were smart in getting paid when they were in th position of holding the cards👍 I haven't gotten stiffed yet on firewood delivery, but it will only take once and I will demand payment before it hits the ground.
Too many irons in the fire

WV Sawmiller

Barbender,

   Yeah when you are 2 hours by boat up in the jungle on a river full of crocodiles and hippos with no roads in or out he was definitely holding all the aces. :D I'm just happy he didn't double the price because I'd have had to pay that too. :o 

   I guess the guide did not want us to pay up front for fear the boat captain would leave us stranded up there after he dropped us off but all the rules changed when we came back from our visit.
Howard Green
WM LT35HDG25(2015) , 2011 4WD F150 Ford Lariat PU, Kawasaki 650 ATV, Stihl 440 Chainsaw, homemade logging arch (w/custom built rear log dolly), JD 750 w/4' wide Bushhog brand FEL

Dad always said "You can shear a sheep a bunch of times but you can only skin him once

Don_Papenburg

I had a company that I did jobs for on a sortof regular basis .  I told them that I wanted paid within 10 days of completion . This worked for the first year then things started to streeech  out  It got up to 3months . and then they needed some work done .  I sent the bill back with 20 .oo added into the total and gave them 10.oo off if paid in 5 days.  from then on every bill had that same discount and every check arrived before five days past.
Frick saw mill  '58   820 John Deere power. Diamond T trucks

stavebuyer

Quote from: Don_Papenburg on December 01, 2018, 11:31:06 PM
I had a company that I did jobs for on a sortof regular basis .  I told them that I wanted paid within 10 days of completion . This worked for the first year then things started to streeech  out  It got up to 3months . and then they needed some work done .  I sent the bill back with 20 .oo added into the total and gave them 10.oo off if paid in 5 days.  from then on every bill had that same discount and every check arrived before five days past.

I only sell to customers who pay on receipt or take the standard 2% discount and pay in less than 10 days. If they cant or won't take the 2% 10 day discount they are poor credit risks in my book.

4x4American

Most wholesale I do the terms are 1-2% Net 10/Net 30.  My favorite is when I ask for net 10 and so they take the discount out but then take 30 days to pay ya...I got into it a couple weeks ago with a place about that the accounts payable lady told me that net 10 means that when the invoice hits her desk she puts it towards the front of the stack not in the back, and however long it takes her to get to it, that's how long it takes.  Dealing with the Amish is another thing..one load the guy promised he'd pay in 10 days and I needed it.  45 days later I saw the check after a bunch of phone calls and excuses.  Seems like you pretty much have to strong arm the other biz as much as possible if you wanna get paid.  Whether you charge a late fee, don't send them any more product til you get paid, or show up at their office and start yelling at people til you get what you want lol   Or just cut ties with them, I had to do that with a place I sold 75% of my lumber to awhile back 
Boy, back in my day..

CCCLLC

Recently cut for a private individual, his personal logs on his property in Lexington, NC. 120 miles from home. After cutting for three days and finished cutting 3 hours sooner than predicted even with him adding 2 more logs to the pile, I handed him the pre approved amount bill. First words from him was he needed my workman's comp. ins. paper work. Suddenly I was a " sub contractor" for his Bob Correll Electric Co. Told him I was a sole proprietor LLC , in NC with no employee, not required , just G.L. He stiffed me 15 percent and smiled the entire time. Not again with him.

ellmoe

Quote from: 4x4American on December 02, 2018, 07:43:32 AMOr just cut ties with them, I had to do that with a place I sold 75% of my lumber to awhile back
That's why I don't get more than 20% of my business with any one customer. The impact of losing a majority of your business in one moment can end your company.

Thirty plus years in the sawmill/millwork business. A sore back and arthritic fingers to prove it!

DMcCoy

To any wanna be business owners reading this thread, the one thing not mentioned is having enough cash in the bank, I cannot stress enough how important this is.  Money pressures can distort sound business decision making.  
 
Bad customers' financial problems can quickly become your financial problems if you are not careful.
A good customer who hits a rough patch will call you, I've had that happen as well. 

Paying late is taught as savvy business, an interest free loan.  I look at it very differently.  Customers paying late is poor form, it causes hard feelings and is likely to morph into poor service, poor quality, or an end of the business relationship. Even though this is obvious to most people it still happens.  All of my customers pay in a timely manner.  Those who don't or won't because they think they are being clever- I want them to be my competitors problem. 

 

Bruno of NH

I used to do work for a certain Ivy league college in my area.
Finally got sick of the hurry up and wait for my money.
Not worth it for me.
I'm not a bank.
Lt 40 wide with 38hp gas and command controls , F350 4x4 dump and lot of contracting tools

sawguy21

My employer, a large player in the industry who shall remain nameless, wouldn't even look at an invoice within 45 days or pay within 60. I was dealing with local suppliers and was frequently refused delivery. I talked to AP and was told we are the largest XXX company in the world, if they want our business they deal on our terms. Talk about arrogance!!! I replied no, if we want their goods and services we work with them. Things changed when one large job got delayed because I couldn't supply the required equipment. There were calls for my head but nothing I could do about it.
old age and treachery will always overcome youth and enthusiasm

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