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  #1  
Old 08-14-2002, 11:11 AM
SellPoint SellPoint is offline
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Location: NW Arkansas
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Billing woes

As a new member I would like to say hello to everyone and say that by the posts I have read thus far this site will be of immeasurable value.

Most of my partner and I's bussiness is maintaining vacant and REO properties for mortgage companies. It's solid steady work, but they pay very SLOWLY. I was just wondering if anyone else has the same troubles and what your solution might be short of litigation, liens, etc....
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Old 08-14-2002, 03:00 PM
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thfireman thfireman is offline
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I cut for a small realty company. The first year they sent my bill for each property to the property owner so they could pay them before they payed me. This year I called and discussed this problem with them and made it clear that the total bill for all properties were due 10 days after they recieved the bill. I usually get their payment within 15 days of sending it to them.

Set a deadline and then charge them a late fee if they dont pay on time. This makes them step up the process.

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Old 08-14-2002, 03:46 PM
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thfireman


how much of a late fee do you charge?--I charge 10% and it do get their attention.
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Old 08-14-2002, 05:10 PM
LawnLad LawnLad is offline
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Check your state laws on maximum penalty. We choose not to charge maximum allowed by law of 24% - we charge 18% per year, or 1.5% per month on outstanding balance. I used to charge in addition a $5.00 late fee, we just upped it to $10.00 this year. Got tired of the same people stringing me out, so I figure if I'm going to keep their business (many of them are right next to or down the street from other clients) then they'll pay for the privilidge to use as a credit institution though we are not.

Set your terms up in your contract and then stick to them. You did the work and should expect to be paid on time. Explain to them that you can not do any more work for them until their account is brought up to date. If you're a reliable vendor for them and they value your service then they'll pay you on time if you request. But since you're not the squeaky wheel, you're not going to get the grease.
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Old 08-14-2002, 06:51 PM
HBFOXJr HBFOXJr is offline
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You could get set up to take credit cards and get a card number from each property owner. Then chargwe their account each time or once per month.

I've been jerked around by real estate people doing irrigation work. They are by far the worst to work for. I want a check when I'm there or a credit card before we go. None of this "at settlement" or I'll send it to the owner etc.
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  #6  
Old 08-14-2002, 08:01 PM
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thfireman thfireman is offline
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Bill,

I charge a 10% late fee figured on the monthly bill. I was considering raising it to 15% but I dont have that much late anymore.
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Old 08-14-2002, 09:09 PM
SellPoint SellPoint is offline
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Location: NW Arkansas
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Thanks for the helpful responses.

Let me try to fill in the blanks a little more. These are national mortgage companies that we contract to. (e.g.) Countrywide, AM South, Homecomings financial, Horizon. They just don't respond most of the time to correspondence. We have even had to wait a few months after a property closed, the representative I spoke with said that it was against thier company policy to pay utilities and so on at closing and that we would just have to wait until our invoice was proccessed.

I wish i could tell my bill collectors that it's against my policy to pay them at this time!
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  #8  
Old 08-15-2002, 07:23 AM
HBFOXJr HBFOXJr is offline
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You may also want to rethink your heavy dependence on this type of business. Possibly you can recruit some other residential or commercial work that would pay better and keep the cash coming better.

Do these accounts make more money than average? Do they lead to doing work for the new buyer that you can retain?

I think you have to work on the terms up front. Possibly another company that does a lot of this stuff can respond here with an up front solution.

My contention is that your problems (client) should not be my problem (contractor). A solution must be found unless the rewards are great and the end justifies the means.
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  #9  
Old 08-18-2002, 02:28 PM
SellPoint SellPoint is offline
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Location: NW Arkansas
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There are some good rewards to contracting to these companies. Generally, they pay $50 a yard for small residential lots. They pay higher for larger lots and for initial mows where the grass is high. Another consideration is that this is lead in work. A lot of times these companies need debris removal where people have moved out and left their junk. These are very lucrative. The rewards are good, but I would like to get paid on a 30 or even 60 day timeframe without resorting to legal means.

Maybe there is no lesser solution when dealing with large entities such as these.

Thanks again for the advice
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  #10  
Old 08-18-2002, 02:45 PM
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Bob Minney Bob Minney is offline
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Many commercial credit accounts have terms of 2% 10 net 30.
My seed and fert supplies offer this discount and I take it.
Can't make that 2% in the bank
Might be worth trying if you want to speed up payments-I bet if they have the money they will take the discount.
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