$50,000 a year customer is not wanting to pay me $400 because his customer didnt pay

[huggytree]

Ive got a real hard decision coming

its my 2nd best customer...they bring me $50,000 a year in business

i did a small job for him 7 weeks ago for a coffee shop. the coffee shop is refusing to pay the plumbing bill for the project. now the builder always holds back my payment until HE gets paid....I have told the builder that even if HIS customer(the coffee shop) doesnt pay that i expect HIS company to pay me anyways......he isnt responding

should i refuse to do future work for this customer if he doesnt pay me? should i give up $50,000(A YEAR) over $400....over a lifetime it could be $1,000,000 over $400................or should i let it go and try to collect directly from HIS customer(the coffee shop).............

next time it could be a $10,000 job where a customer refuses to pay....maybe its best to get out while the lose is $400.....

or maybe he will pay the $400 when i refuse to do future work for him....

from past conversations and my gut feeling i think he wont pay when his customer didnt pay him......he's always refused to pay until he got paid in the past...i think its just his way of doing business.

yea i could just add $100 to the next 4 jobs from him.....i wont lose the $400 either way....its just the fact that he may screw me in the future for alot more money.....

these things always happen when im very slow.....when $400 actually matters.......and these issues are always for $200-400 where they are barely worth fussing over...

he has asked me to start the lien process on this customer....that process costs me $45+ for each of the 3 steps....ive asked him for the owners phone number so i can let him know the lien process is starting....

i may call the customer next week and go around the builder (cutting him out of his markup)...since he doesnt care about paying me i may not worry about his markup...

its a can of worms at this point

[Dan Furman]

#1, do NOT add $100 to future bills. Padding a bill is dishonest, no matter how you try to justify it. One has nothing to do with the other.

I'll have more thoughts later, but wow, that jumped right out at me.

[vangogh]

I wouldn't throw away $50,000 a year for $400. That just seems like shooting off your nose to spite your face. I don't have the same objections to the padding as Dan does, though there are some conditions to my not having those objections. If it's the coffee shop who owes you money then it's not fair to charge the builder at all. If it's the builder that owes you the money then I think it's fair to recover the money. At the same time I still don't think it's worth risking $50,000 for $400.

Sure it sucks not getting paid, but is it worth losing more to worry about it. Do what you can to collect from whoever owes you, but if they don't pay don't worry too much about it. It's a small job. Write it off.

[Dan Furman]

Here's the thing about padding the bill - it's dishonest. If you want, add the $400 and say "past due amount", but don't pad. Because you have to lie to pad. Don't lie. Lying in business is an awful way to go about things, especially when it comes to money.

Perhaps you want to find out why the coffee shop plumbing job isn't being paid - was there an issue with your work? With promises made? What's the deal there?

[Spider]

... i did a small job for him 7 weeks ago for a coffee shop. the coffee shop is refusing to pay the plumbing bill for the project. now the builder always holds back my payment until HE gets paid....I have told the builder that even if HIS customer(the coffee shop) doesnt pay that i expect HIS company to pay me anyways......he isnt responding...If the builder hired you, it is the builder's bill to pay. That is the law of contract. Therefore, you cannot put a lien on a property owned by someone else. Those are the facts of the case, but - wait! There's more!!!

You said, "i did a small job for him ... for a coffee shop" so did the builder hire you or just give you a referral? No, the builder hired you if he billed the client with his mark up, as seems to be the case.

Was the plumbing work part of a project involving other trades, or was it plumbing work only? You said, "the coffee shop is refusing to pay the plumbing bill for the project." Which seems to imply that it was a project, thus involving other trades. So was the rest of the project paid for but not the plumbing work?

It seems clear to me that the client has some reason (valid or not) for witholding payment "for the plumbing work." That puts the issue squarely back on your shoulders to complete your job of satisfying your client (the builder) by satisfying his client (the coffeeshop owner.)

Why is there no mention in this story of your attempts to correct whatever appears to be wrong with the plumbing or finding out why the coffeeshop owner is refusing to pay?

[vangogh]

Here's the thing about padding the bill - it's dishonest.

I understand where you're coming from, but let me try to state my case. With certain businesses the price of a job isn't fixed. Someone comes to you with a project and you give them a price. They agree or disagree. Ultimately the price of the job is what you both agree to.

Say you charge $100/hr and a client comes to you for a job that will take 10 hours and you give the client a price of $1000. The client agrees.

Say a few days later you raise your rates to $125. Another client comes to you for a job that will take the same 10 hours. The price is now $1250 and again the client agrees.

Was it unfair to the second client?

What if on the the first job what you thought would take 10 hours only takes you 9 hours. Do you give the client back $100? If it ended up taking 11 hours did the client give you an extra $100. Realistically most projects probably take a little more or less time than you thought. Does that mean anyone is being treated unfairly? Is anyone being dishonest?

I think as long as both parties agree to the price then it's fair. If huggy adds $100 to the price of a job the builder could say no if he doesn't think the price is fair. If the builder agrees to the price with the extra $100 is it really dishonest?

[Steve B]

Sorry VG - in one of your situations above you're comparing apples and oranges. If you are charging more because you independently decided to raise your price - how does that even remotely compare to charging more because you are angry from a previous and unrelated situation? Just because it's hard or impossible to detect by the customer it doesn't mean it's not "padding" the bill. HT will know if and when he is doing it and he'll know (at least now) than Dan (and I) consider it dishonest. You should develop a trust with your clients and should cherish the ones that accept your quotes because they think you've been fair to them in the past, therefore, they don't shop around for every single future job.

I'm not sure I understand the contract in this case. I would pursue it like you would other similar situations. When it comes down to the final decision of digging in your heels (i.e. going to court or filing a lien) then you just have to decide it like any other business decision.

[vangogh]

What I'm saying is there's no fixed price in the first place. There are any number of reasons why the same job could be priced $100 higher. What's the difference if that reason is because you raised your rates or because you overestimate the time and work involved or because you added in $100 to recover a previous bill the customer refused to pay? As long as the customer agrees to the current price how is the price dishonest?

What exactly does padding the bill mean? If company x charges $100 for a service and company y charges $125, does that mean company y padded the bill?

I'm not saying huggy should try to recover the $400. I think it's a small amount to worry about given how much this customer spends. I agree that the best thing to do is build a trusting relationship with the customer. I also think that if he increases the price of some future jobs he runs the risk of losing the customer so again I wouldn't do it.

[nealrm]

I think everyone (Except spider) is missing the main point - Why is the coffee shop refusing to pay the plumbing portion of the bill? If there is a problem with the plumbing, either real or perceived, then Huggytree should be told of the issues and giving a chance to resolve it. If it is a real issue, then the owner and contractor have the right to hold payment until everything is fixed.

So until we know the reason for withholding the payment, there really not a correct answer to this.

[billbenson]

I was thinking the same thing. Other than the risk / reward ratio is way out of proportion, we don't know if Huggy has talked to the coffee shop, or what else he has done to get to the root of the problem.

[Dan Furman]

I think everyone (Except spider) is missing the main point - Why is the coffee shop refusing to pay the plumbing portion of the bill?

*ahem*... I think I said that first ;)

[nealrm]

I humbly request your forgiveness for my thoughtless and egregiousness oversight. :eek:

[huggytree]

there is no issue with the plumbing....all i did was cap off some plumbing inside a wall and pull a permit

with my minimun charges and the permit + some parts/tax the bill was probably $250 range for 25 mins of work....and who knows what the builder added

i dont know what the issue is exactly but its more of a disagreement with the builder....this has nothing to do with MY WORK

padding a $5,000 project by $100 means nothing..no one would ever notice....ive had builders ask me for a discount on jobs where they screwed up on price.....they had me pad their future projects to get the $ back....there was nothing dishonest between me and the builder..they knew i was going to be doing it.....is it fair for the homeowner who has to pay $100 extra? yes and no....they are not forced to pay anything......they know the price ahead of time and my plumbing is competitive...$100 is typically so small it doesnt show up to anyone

[billbenson]

Did you ask the coffee shop why they aren't paying the builder?

[BeTheBest]

I don't think you need to worry about 'risking' your builder client... just yet. I agree with the others... why isn't the coffee shop paying the builder??

Once you understand that, you may want to get rid of the builder as a client. If it's his overall work (which includes all his other subs) then you may not want to be in that 'crowd'.

It's a tuff one... but you still have to get to the root of the problem first. Then make your decisions.

Hope this helps!

[greenoak]

i would TALK to the big customer ....and see how it really is when the customer doesnt pay....i would go into it that i didnt care how this situation turned out, that i wasnt mad about it....BUT that i needed to know if i would how he expected this to work out in all the future situations .... and bring up that you might not like all that burden, since you didnt choose the customers ....
but stay with the point that you can deal with this situation , this time at least...
i would try hard to keep the connection with the big guy....
i think upcharging him in future is silly.... he would know etc etc....
hopefully you can come to some better understanding with him...and let him know you value working with him.....but air your concern and limits too...
i wouldnt get in a lien situation over this.... its kind of murky...

[huggytree]

any upcharges would be known to my builder/remodeler.....nothing would be secret between us

i have not contacted this coffee shop owner because its not really my customer...my customer is the builder.....contacting HIS customer is a major NO NO for many builders...no contact between me and his customer is typical....i asked for the phone # anyways......i would have researched the coffee shop and called if the builder refused to pay....oh yea the coffee shop owner has dread locks and goes by the name Ravin....enough said ...

just got an e-mail and the customer has paid the builder and i will have a check in the mail tomorrow

my only concern is : what about next time....when its $10,000 owed...i worry this builder will stiff me......


as far as liens go: i can lien any customer...regardless if they pay me directly or through a builder....i typically do a prelien on all jobs over $5,000

what i may do with this builder is to do the prelien on ALL his jobs and charge him for it in my prices.....it will just be part of my bid....i wont discuss it(since i dont discuss the larger jobs that i do this on already).....i cant hide it on the small T&M jobs like this coffee shop was

im glad its all going to be resolved...losing a customer over a dispute over a few hundred is not a good thing, but neither is working for a customer who screwed you.....im tough on collections and am still at 100 percent.......work in my area is the worst ive ever seen it right now...losing any customer for any reason would be horrible and not something i could replace.....im just glad that i have a diverse customer base....if i had lost him id survive....no customer is more than 15percent of my sales...if he had been 50 percent id have to kiss his @ss and take what he gives me....

[limekwat]

I'm glad everything got resolved and you were able to keep the customer! That seemed like an incredibly sticky situation. The lesson to be learned seems to be that some people are just, well, terrible people.