Staged payments - client not paying

[Octopus]

I'm after some opinions please.

Full rewire, original agreement was payment on completion of first fix, then second fix then on completion.

Project has had "a few" unscheduled" pauses (caused by other trades) so payments were agreed to be at month ends. All was going well until submission of my March invoice which hasn't been paid, and still hasn't.

Client is now saying they won't pay until its all done, completed and tested.

Whilst I could accommodate this change its leaving me awfully short of cash and my concern now is what if they delay payments again I'll be in trouble with the bank.

My inclination is to complete the live testing then remove the busbars from the CU until they pay .....

How would approach this?

 

[Mark_Burgess]

Was your original agreement in writing?

If not, I like your way of thinking to get payment especially if you have a bad feeling about it.

 

[KFH]

Ask why he is not paying. Emphasise your original agreement, if not in writing as mentioned by Mark you have little legal leverage, was stage payments and through no fault of yours it has been delayed which is now causing you problems with cash flow. Ensure that you know exactly how much work you have done and if you were receiving stage payments where you would be up to now compared with what you have actually received. It is better to start negotiation than to pull the plug immediately as it may be something simple such as that he thinks he has overpaid you for what you have done to date, you may be able to reach a compromise or even get everything owed. But if he is just being a ******* then your solution sounds a good one, but new busbars are not expensive if he knows another electrician. Witholding the EIC may be an alternative.

 

[topquark]

As stated, I hope it's a written contract. First approach, be honest with the client, remind them what the agreement is. Do they even understand what first fix stage is? If they won't budge then try to get an agreement to pay for materials so you can cover your supplies costs. Only give a certificate that's clearly marked "DRAFT" on completion, until you have been paid.

 

[ian]

Personally, I would just be honest with them, explain thatyou are outstanding a lot of money and you are just a small business and cantafford to be without and that’s why staged payment were agreed. If they aredecent folks they will sort you out.

 

[Geordie Spark]

Always remember for the future: A verbal agreement isn't worth the paper it's written on !!!

Good luck and I hope that when you've explained everything to your client you get your money.

 

[DurhamSparky]

inform customer you will at the next stage rip it all out at his expense and cost....!!

 

[IQ Electrical]

This demonstrates the importance of contracts and terms & conditions.

We are using e-mail more and more as a good record of instructions, variations and extras which always seem to be forgotten by the time the installation is complete and you're trying to settle the final account!

Have other trades been paid as per their agreements?

 

[Octopus]

I Q, this isn't the final bill that's due, that's to come, and I've been buying more kit during April so I'm out of pocket for more than the unpaid invoice!

I know the plumber is also owed money as for the others I think they may be on a cash basis..

 

[Electricalserv]

So you have done the first fix and they have not paid up? So the agreement you had has been broken before it began. Not a good sign and probably a wise decision to take this method of payment. Otherwise you could have been footing the bill for the whole rewire. If they don't pay up walk away. They will have to get someone in to out there name to it and not many sparks are going to do that!

 

[morph]

So you have done the first fix and they have not paid up? So the agreement you had has been broken before it began. Not a good sign and probably a wise decision to take this method of payment. Otherwise you could have been footing the bill for the whole rewire. If they don't pay up walk away. They will have to get someone in to out there name to it and not many sparks are going to do that!

plenty of so called sparks will finnish and job .....no problem, you assume that everyone is as ethical as you, well they aint...
i would be threatning to rip my work out and bill them for the time i have spent doing it. DOUBT THEY WILL PAY but at least they dont get your work for free

 

[topquark]

I guess another approach could be to get it finished asap (so it's at a stage where you can finally bill it). Are there any show stoppers to getting second fix and testing done?

 

[IQ Electrical]

So you have done the first fix and they have not paid up? So the agreement you had has been broken before it began. Not a good sign and probably a wise decision to take this method of payment. Otherwise you could have been footing the bill for the whole rewire. If they don't pay up walk away. They will have to get someone in to out there name to it and not many sparks are going to do that!

Walk away? Are you serious?

In my experience, clients delay payments and try to justify reducing payments but they rarely refuse to pay when challenged in the right manner!

You need to talk to the client as a matter of urgency and get things moving again, whatever you do, DO NOT WALK AWAY!

 

[Electricalserv]

From what I gather here you haven't kept to the time scale you promised. Leaving the customer unhappy. If that is the case you need get back on their side and talk to them. If that isn't the case and the customer has broken the deal at the first payment I would invoice for the first payment and walk away. You have proved early that they aren't good payers. Why put yourself in a financially bad position by finishing the work when you are struggling getting your first payment?? It's common sense here.can you afford the risk? Employees wages and lost materials? I know what I'd do..... No work until first payment .. As agreed!

 

[Octopus]

From what I gather here you haven't kept to the time scale you promised. Leaving the customer unhappy. If that is the case you need get back on their side and talk to them. If that isn't the case and the customer has broken the deal at the first payment I would invoice for the first payment and walk away. You have proved early that they aren't good payers. Why put yourself in a financially bad position by finishing the work when you are struggling getting your first payment?? It's common sense here.can you afford the risk? Employees wages and lost materials? I know what I'd do..... No work until first payment .. As agreed!

I'm not behind, the project is behind due to delays and rework with other trades

 

[Electricalserv]

Well tell them. No more work until first payment 'as agreed' all the more reason to get things in writing!n

 

[grantr37]

Personally, I would just be honest with them, explain thatyou are outstanding a lot of money and you are just a small business and cantafford to be without and that’s why staged payment were agreed. If they aredecent folks they will sort you out.

Looks like they are doing what a lot of customers seem to do these days, they will get you to finish the work then tell you to ham-burger off , if you pull out any parts until paid, they will just get another sparky in who will replace the missing components and call you a door-knob...they will then proceed to tell him to bill you for the costs and will probably take you to the small claims seeking compo, and /or report you to any schemes they manage to look up online...if theres any arguements over money they will just turn round and say that you were paid the agreed amount in full (which you were not but they will try to say that) or they will say that the work was not completed so they withheld final sums requested...if you walk now they will get it finished by somebody else and try to bill you for "breach of contract/breach of agreement"

The best thing to do is to finish off the job as quickly as possible, give them 4 weeks to pay up (while away doing other work) then send them a letter, after another two weeks send them a recorded delivery letter, if that doesnt work, take a small claims out, but the costs might well be more than you get back...

from now on, if you dont know the customer or they live more than 30 miles or so away, always get a small contract signed, otherwise they will just ignore your phonecalls etc....a thing to be careful with this one is that the person might sell the house/building shortly after the work is finished by the trades, take the money less tax....and bail out of the area to find more victims, I had a bad experience a few years ago with somebody like that, they built a house, sold it and moved hundreds of miles to build another one...and sold that too....eventually found out that they had been doing that for 5 years or so and are now a multi-millionaire....they stung lots and lots of companies and tradesmen along their path to wealth...

The person bailed out of town owing about 12 grand to a tool and plant hire shop for tools "bought" and for hire of equipment....which he had been tabbing up on slate for about a year....lots of drills and grinders bought and not paid for etc...

 

[PC Electrics]

Murdoch, did you have a contract or not?

Avoiding this question just leaves some of us believing that you haven't, and so you've shot yourself in the foot.

If you haven't got a contract, this could be a deliberate ploy on the part of the client on his way to stinging you. So go in and remove as much as you can and cut off the 'tails' in back boxes (so no-one else can just pick up where you left off). Pull as much cable back out from under the first floor as you can too. And since you didn't have a contract - well, you never went near the place, did you.

What is your gut feeling? Is he pulling a fast one?

 

[rjm]

Hi,
I am very sorry to hear that you have not been paid, i hope you have not releasted any completion forms? dont sign the job off untill you have been paid in full, this will cause them real problems with building control,in future you must get all the money up front by use of a proforma invoice for all the materials required and if they cant pay this it usually means that they cant pay anyway, if for some reson they dont pay you soon please let me know and i will let you have more info as to what to do next...

Rjm

 

[morph]

it wont cause problems cos someon else will sign it off

Hi,
I am very sorry to hear that you have not been paid, i hope you have not releasted any completion forms? dont sign the job off untill you have been paid in full, this will cause them real problems with building control,in future you must get all the money up front by use of a proforma invoice for all the materials required and if they cant pay this it usually means that they cant pay anyway, if for some reson they dont pay you soon please let me know and i will let you have more info as to what to do next...

Rjm

 

[IQ Electrical]

it wont cause problems cos someon else will sign it off

I agree, there is always someone to 'sign off' if the price is right!

Out of interest, does anyone doing domestic installs use this 'proforma invoice material cost up-front' idea?

I can't imagine Mrs Smith going for that if 2 other companies just go the payment on completion route?

 

[geoffa]

I agree with parts of posts.
Busbars are cheap.
i'd be inclined to call his bluff.
Refuse to do anymore work until he honours his agreement.
If he tries to pull in a different electrician call there once a day to see if someone takes it on and fill them in on the facts.
spread the word through the suppliers too with an advert.
If he does pay the stage payment he's likely to take you on completion, so ask for the cash only before signing the job off. I'd remove the busbar, breakers and the rcd's until he paid too.
Avoid cheques at all costs.
hate clients that don't pay.
had to wait 6 months for £2k last year unitl the guys divorce settlement was finalised. didn't stop him spending money that he should have put aside for me on furniture and floor tiles and **** he didn't need like chickens. *******

edit.
that's clever: automatically replaces swear words with *. what i was trying to say was *******

 

[Dan]

Anybody actually checkout out how our sponsor works? Invoice Chasing | Chase Invoices | Failed Billing | Invoices Chasers | Credit Control | Credit Management
It's their exact field. But I'm not sure if you have to get your contracts approved by them, or what?

 

[bugsy]

I get this with commercial quite a bit , and when your refer to the contract they always manage to find a reason not to pay 10 years ago I was stuffed on two contracts I was working on with Overbury ( yes I can name them and they can take me to court if they wish) on one contract they did me for £20k and on the other they did me for £30k both in the same month.
They knew I couldnt afford to take them to court and could'nt give a damn
Just be very careful who you do buisness with!

 

[davetherave1979]

If we do a domestic job for over £1000.00 we get 25% up front on start of job and the rest on compleation or at different stages this seems to be the trend with security companys thay get a percentage up front before thay send an engerne in to carry out any work.

 

[telectrix]

30% up front, 30% on 1st fix. Balance on completion.works for me.

 

[lost-sole]

Rip his arm off then beat him around the head with it

 

[iconnect]

I have a customer at the moment every time the final payment is due she comes up with a snag list !! Four snag lists down the line going back Sat and if she does not pay I am removing the lot as per my terms and conditions, all materials are the companies until full and final payment. The snag sheet she has given me this time is a joke. Things like downlighters not sitting flush to the ceiling x11 lol and I bet when I get there they have decoratored and moved them. People are getting worried about sparks not completing and not certificating the work, I would email them stating the agreement you had and asking for the reason for none payment.

 

[timo1]

I'm gutted for you mate. I unfortunately learnt a similar lesson and it changed the way I deal with people completely. I now make sure that I give a written quote every time (even friends) and create an email trail. I have friends who have been done out of thousands of pounds and it is obvious that some people make a living doing trades out of money, well Karma will get them, but in the meantime if you think they won't pay, I would "by accident" ram a nail somewhere in every circuit where only you can fix - hours of fun for any spark behind you.

 

[grantr37]

I'm gutted for you mate. I unfortunately learnt a similar lesson and it changed the way I deal with people completely. I now make sure that I give a written quote every time (even friends) and create an email trail. I have friends who have been done out of thousands of pounds and it is obvious that some people make a living doing trades out of money, well Karma will get them, but in the meantime if you think they won't pay, I would "by accident" ram a nail somewhere in every circuit where only you can fix - hours of fun for any spark behind you.

they sure do, I have had it happen to me once, and have seen it happen to several other people and small businesses as well, one was for an extension on a house, at the end of it the woman refused to pay over 30k and said that she wanted all the doors to open outwards instead of inwards into the house, the builder said that was not allowed with building control and wouldnt do it, she said- no payment then....and he walked empty handed out of principle...

 

[IQ Electrical]

Well you would walk away from £30,000 on principle, wouldn't you?

 

[telectrix]

i'd have walked away and returned with a bulldozer. amazing how these people cough up when threatened with demolition.

 

[The Cavalry]

I know how you feel, am just finding out how to take someone to court. Apparently you can make someone bankrupt if they owe 750 or more! next stop 'how to put a charge on a property' !!

 

[accordfire]

I know how you feel, am just finding out how to take someone to court. Apparently you can make someone bankrupt if they owe 750 or more! next stop 'how to put a charge on a property' !!

If a person owes more than £750, you can invoke a statutory document against a person, petitioning bankruptcy, called a STATUTORY DEMAND. If your debtor is a business, look into a winding up petition.

Go the route of a statutory demand, and you won't need to worry about property charges. It's cheap too.

 

[accordfire]

I'm after some opinions please.

Full rewire, original agreement was payment on completion of first fix, then second fix then on completion.

Project has had "a few" unscheduled" pauses (caused by other trades) so payments were agreed to be at month ends. All was going well until submission of my March invoice which hasn't been paid, and still hasn't.

Client is now saying they won't pay until its all done, completed and tested.

Whilst I could accommodate this change its leaving me awfully short of cash and my concern now is what if they delay payments again I'll be in trouble with the bank.

My inclination is to complete the live testing then remove the busbars from the CU until they pay .....

How would approach this?

Murdoch - like others have said, first step is to identify whether or not this contract was on written terms, or if it was a verbal agreement. By what means did you come to an agreement with the customer that they would pay monthly or in stages? Was it verbal?

If written, you have the basis of a court claim, and other actions. If not, bluff will be your best bet (within reason).

Given the situation you seem to be in - e.g. one payment missed, further materials on account, you need to act now, and stop all work until the matter is resolved.

Your first best bet is to meet face to face with the customer, and present them with the originally agreed terms, and ask, again, to be paid to date, so you can fulfil the reminder of your obligations under your agreement. If they refuse, ask why, and ask for it in writing.

Your likely response in this case will be issue of (a) a solicitor's letter, and (b) court papers or a statutory demand.

I would, prior to this, ensure that any materials purchased but not yet used, are removed from site forthwith, until such time as you can fit them, or return them to your supplier for credit.

It's hard to know exactly how to advise without further information about the basis of the agreement, and current status though.

 

[nick182]

plenty of so called sparks will finnish and job .....no problem, you assume that everyone is as ethical as you, well they aint...
i would be threatning to rip my work out and bill them for the time i have spent doing it. DOUBT THEY WILL PAY but at least they dont get your work for free

Can you actually do that or can they charge you with vandalism? Im in the same boat in terms of not getting paid.. and ive installed downlights, emergency lighting etc?

I seriously want to rip it all out now infront of his customers and bill him for the time spent doing so.

 

[tawraste]

wasn't there a builder in the news about a year or so ago who turned up at a non paying clients' house and took down the porch he had built for her?
i'm pretty sure he got away with that, and amid much publicity too. i've tried to google this news item, but unfortunately i'm out of time - should have left the house a good 10 minutes ago.....

 

[tawraste]

here we go:
Builder | Hit back | Demolished porch and conservatory | Not paid for | The Sun |News

 

[Mark_Burgess]

I would have loved to have been a neighbour watching and laughing at it!!

 

[topquark]

I bet he had a nice big grin of satisfaction on his face as well

 

[Big n Daft]

Talk to the client, find a way forward that involves them parting with cash. What has been said before, they think they have paid too much for work at present, may be the case. If so put your case forward. Then have a signed contract for all works going forward.
If they then become stubborn, nails, materials away, take everything you can then stat demand or small claims on line.:90: