Many of you do handyman projects or work for property management companies. Here is something that you need to watch.
Many times when you are working with property management companies they can be a little slow or even darned slow about paying. A friend of mine, Abe WalkingBear, who writes a lot about credit and is considered a Guru of credit management, says that your accounts receivable could run as high as 40%.
I don’t like accounts receivable in construction, but they can happen, especially with property management accounts. As long as you stay on top of them and don’t let them go beyond 30 days, you will be OK.
But you can prevent accounts receivable if you put two prices on your invoice. The first price is inflated by 25% to 30%, with 30 day payment terms. The second price is your price for the job, but must be paid within 3 to 5 days of job completion. This is a discount for early pay. Trust me, you will get your money much, much quicker.
Now, you will have folks that still hold your money for 30 to 45 days and then try to take the discount. Don’t accept it – send the check right back, remind them of the contract terms and from then on you should be paid on time. If they want to argue, you don’t want that business.
Hang in there gang, we will get through this, and may the profits be with you.