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We've had some very large corporations (Fortune 500+) change (no permission requested) their payment terms to 2%-10 NET 45. We've even had one ask that we not invoice a very large project until it has been completed. That could mean no cashola until 90+ days. It's not like they paid net 30 anyway, but we usually received payment within 40-55 days, now its 55-65 days +. I don't think I've ever had an owner take advantage of a discount.

Don't these guys understand that payroll cash has to roll 10 days or less from the time you put someone on the payroll? (if you pay weekly). 10 days. And they want to pay us in 60-90? And they don't understand why our rates are so friggin high? :)sphss

How pathetic is that? Big business using small business to bank roll their projects? Sure its been going on forever between contractors, but until last year I've never seen Net 45 terms from an owner. Well, with the exception of muni's, they've always sucked.

Surly they have to realize the banks are squeezing the hell out of the little guy as well? And its not like we have $100M in collateral to back up our notes.

The good news is we have work for you, the bad news is we can't pay you for 60-90 days :)sphss

Banking off the backs of contractors, guess its the new American way.
 

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I have a customer that keeps asking on every new job we get with them how much discount can they get for paying in 30 days. Same response...no discount for paying on time. :|err
 

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We've had some very large corporations (Fortune 500+) change (no permission requested) their payment terms to 2%-10 NET 45. We've even had one ask that we not invoice a very large project until it has been completed. That could mean no cashola until 90+ days. It's not like they paid net 30 anyway, but we usually received payment within 40-55 days, now its 55-65 days +. I don't think I've ever had an owner take advantage of a discount.

Don't these guys understand that payroll cash has to roll 10 days or less from the time you put someone on the payroll? (if you pay weekly). 10 days. And they want to pay us in 60-90? And they don't understand why our rates are so friggin high? :)sphss

How pathetic is that? Big business using small business to bank roll their projects? Sure its been going on forever between contractors, but until last year I've never seen Net 45 terms from an owner. Well, with the exception of muni's, they've always sucked.

Surly they have to realize the banks are squeezing the hell out of the little guy as well? And its not like we have $100M in collateral to back up our notes.

The good news is we have work for you, the bad news is we can't pay you for 60-90 days :)sphss

Banking off the backs of contractors, guess its the new American way.
I said it a while back. This whole crisis and merger has created by default collusion. The big banks were bought out by bigger banks shrinking consumers options giving more control to the banks that made it through the mess. You want work or money? Bend over!

I'm part owner in a bank. We own the bank, licence, lending certs, bonds but no funding to get it going. It's like having a new Ferrari in the garage with no keys.:)grn
 
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I have a customer that keeps asking on every new job we get with them how much discount can they get for paying in 30 days. Same response...no discount for paying on time. :|err
LOL. I tried that with my mortgage, hey if I pay on time or early can I get a discount? yeah, sure Mister.:)sphss
 

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discount if paid within 30, ha thats funny. I've been offered 1/2% net 10 and 1% COD. I've seen our recievables stretch way way out since all this shiat has started. Its a daily fight to get our customers to pay within 60-90 days. Getting paid by my customers on a net 30 is a thing of the past right now. But my suppliers are demanding net 30 and are taking a very very tuff position on this, more so than ever before. Since i'm the smaller guy out of my suppliers and customers I'm getting Phucked the worst. Joint checks are getting more and more used (keeps suppliers off my ass a little)
 

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My AR is the largest it’s ever been. Customers are paying…. Just slow. I hate the 40k invoice and at 45 days they call and put it on a CC. :|err
 
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sure glad I don't have the problem.. I think I'd shot myself:p
I'd shoot my CPA if he was credit card or COD only :D

My AR is the largest it’s ever been. Customers are paying…. Just slow. I hate the 40k invoice and at 45 days they call and put it on a CC. :|err
Thats because your customers made you their bank. My A/R would choke a horse right now. Good news is very little bad debt, like $30K last year. As long as it stays that way life is good.

What do they say, an invoice is really a loan until it gets paid. And we make lots of loans :D
 

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I saw this coming about a year ago. The companies that I was dealing with that were consistently over thirty days started getting a 1-1.25% average bump in new work. Its now settled at about a 10-12% increase in price for those that continually pay late. I pretty much figured if I was going to carry the paper I was going to charge for it.
 

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banks are my main customers. they pay slow. the wheels turn slowly and many hands have to rub across the file before it gets to the $14 an hour person who actually cuts the checks.

god forbid there is a W-9 missing or photos not sent, then its rejected, but they don't bother to tell you....so it sits on someone's desk till you complain...then you get to go to the back of the line again..


60 90 120 days.....not too unfamiliar..

Man----> $400K in receivables all the time <-----delon

The only way I'll ever get to keep any of the money we make is if I shut down and lock the damn doors!

shaky customers get a Prelim nowadays...
 

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At any given time our receivables and 250-300k. And the bank cut my credit line back to 100k. The good news is as soon as I show them a loss this year my credit line will be zero. Anyone use a factoring company??
 

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At any given time our receivables and 250-300k. And the bank cut my credit line back to 100k. The good news is as soon as I show them a loss this year my credit line will be zero. Anyone use a factoring company??
Avoid factoring companies at all costs. Literally. I've had those vultures come around from time to time, there rates were somewhere around 2%.
 

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At any given time our receivables and 250-300k. And the bank cut my credit line back to 100k. The good news is as soon as I show them a loss this year my credit line will be zero. Anyone use a factoring company??
I would use a factoring company if it is your absolute last resort. They are like said earlier vultures. Not to mention your customers are not going to be happy once they realize you are factoring. These factoring companies become like collection agencies to your customer. They will call trying to collect like the mafia is carrying the debt.
 

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Avoid factoring companies at all costs. Literally. I've had those vultures come around from time to time, there rates were somewhere around 2%.
At 2% I'd jump all over it if needed, that's cheap. 10-15 years ago I talked to a factoring company, yes I needed cash now. Raters where just under 50%. Made it by without using them and I'm pretty sure I wouldn't have made it if I used them.
 

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At 2% I'd jump all over it if needed, that's cheap. 10-15 years ago I talked to a factoring company, yes I needed cash now. Raters where just under 50%. Made it by without using them and I'm pretty sure I wouldn't have made it if I used them.
24%, overall rate was out of site to me, can't even imagine paying 50%(per annum).
 

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We've had some very large corporations (Fortune 500+) change (no permission requested) their payment terms to 2%-10 NET 45. We've even had one ask that we not invoice a very large project until it has been completed. That could mean no cashola until 90+ days. It's not like they paid net 30 anyway, but we usually received payment within 40-55 days, now its 55-65 days +. I don't think I've ever had an owner take advantage of a discount.

Don't these guys understand that payroll cash has to roll 10 days or less from the time you put someone on the payroll? (if you pay weekly). 10 days. And they want to pay us in 60-90? And they don't understand why our rates are so friggin high? :)sphss

How pathetic is that? Big business using small business to bank roll their projects? Sure its been going on forever between contractors, but until last year I've never seen Net 45 terms from an owner. Well, with the exception of muni's, they've always sucked.

Surly they have to realize the banks are squeezing the hell out of the little guy as well? And its not like we have $100M in collateral to back up our notes.

The good news is we have work for you, the bad news is we can't pay you for 60-90 days :)sphss

Banking off the backs of contractors, guess its the new American way.
Were a small business but do business with lots of large corps and have seen nearly all this. We are resonably well capitalized so we NEVER offer a quick payment discount anymore. Tried it for a while and the company's ALWAYS took the discount and NEVER met the early payment. Like you noted, net 30 is more like 45-50 anyway.
For our suppliers, I got them accept Net 45 from us as part of an exclusive purchasing agreement. One supplier has actually bankrolled a couple projects that we couldn't fund.... Helps to have great suppliers. If I know a project could be a slow pay, I talk to them up front before I bid it. I'd think most suppliers today don't want to lose business either and will work with you.
Being in business in today's enviroment and in CA no less, is really tough... Never done the factoring deal... sounds like those check cashing stores for businesses....
 

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We've had some very large corporations (Fortune 500+) change (no permission requested) their payment terms to 2%-10 NET 45. We've even had one ask that we not invoice a very large project until it has been completed. That could mean no cashola until 90+ days. It's not like they paid net 30 anyway, but we usually received payment within 40-55 days, now its 55-65 days +. I don't think I've ever had an owner take advantage of a discount.

Don't these guys understand that payroll cash has to roll 10 days or less from the time you put someone on the payroll? (if you pay weekly). 10 days. And they want to pay us in 60-90? And they don't understand why our rates are so friggin high? :)sphss

How pathetic is that? Big business using small business to bank roll their projects? Sure its been going on forever between contractors, but until last year I've never seen Net 45 terms from an owner. Well, with the exception of muni's, they've always sucked.

Surly they have to realize the banks are squeezing the hell out of the little guy as well? And its not like we have $100M in collateral to back up our notes.

The good news is we have work for you, the bad news is we can't pay you for 60-90 days :)sphss

Banking off the backs of contractors, guess its the new American way.
We offer 2%-10 or 3%-5. Some of our customers jump all over it especially when you are talking a fairly large invoice.

Our typical terms these days for new accounts are as follows....."COD" on the first few orders then we will determine if we will be extending credit to you at a later date. The new accounts that are really pushing for credit typically are looking for someone to finance there project as they are tapped out with their typical suppliers. Unfortunatley sometimes you pick up new customers by default.

We also run D&B reports on those new companies that are requesting credit, one other way to justify the first COD project. "Accounting has to run all the required credit references before credit can be established".

You have to be extremely careful with carrying projects these days for new accounts. They just don't care that you have to lay out 6 weeks worth of payroll, inventory bills due net30 and then you have to wait 45-60 days to get paid. The little guy has now become the banks, but it's either that or don't get any work so what do you do.....
 

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Yep, also experiencing the delay syndrome. WTF?
My customers are insurance carriers. Try paying a premium late...HA:|err
 
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