Customer won't pay.

[gene]

My first ever customer who refuses to pay their bill. It's about 2 months late. My terms have always been 50% with the order and the remainder paid when the job is finished.

I know I'm lucky that this is the first one. It happens to way too many small business owners.

It's a furniture store and my only advantage is that I have their fabric for a few upcoming jobs. I need to be paid before we talk about this fabric or any upcoming jobs.

It's easy to speculate why they aren't paying: no cash flow, they feel thsy it's not a priority, ??? I'm staying away from guessing and only focusing on the issue of I haven't been paid.

One recourse will be to sue in small claims court and then sell my judgement to a collection agency for a percentage of the amount. I don't know if I would want to take the time and have another filing fee to get a court order to force them to pay the small claims court judgement. As an LLC in my state I can do both of these things myself without a lawyer. 

At this point I have decided that if they pay me, all future jobs will be cash with order.

And I do have email correspondence where they said they would send me a check that day, which was 5 weeks ago. My latest emails have gone unanswered.

The cost of doing business.

Gene

[SteveA]

The thing about these situations are that they knew they were having money problems when they gave you the job.  There aren't tons of profit in what we do and one loss is a big hit.
Two years ago a van line was failing and I didn't know it.  I worked for them for over thirty years and never had a problem.  In the end they owed me $ 1700.00 I never collected.  To make it worse I got a lawyers letter from them telling they they would sell down their assets and pay their debts and to be patient.  After the first year they completely disappeared and can't be reached by phone or email.    At least you have the fabric as leverage
SA

[sofadoc]

It's a furniture store and my only advantage is that I have their fabric for a few upcoming jobs.

Which probably means that a few poor sap customers have already paid a deposit for the fabric that you have in your possession.
The store took their deposit, ordered the fabric on net-30, and have now stiffed their suppliers, you, and their customers.

[SteveA]

Doc the poor guy might be suicidal - but I always like your take on these things - 
Way to talk him off the ledge :)
SA

[65Buick]

We had the exact situation here not long ago. Customers paid for furniture, never got it. The co knew they were in trouble.
I guess some people calculate that it's worth it to forge ahead and stiff others rather than shut the place.
Sounds like you know the deal with scc though Gene.
I tell people that the balance is due on day of delivery (i.e. before i let go of it) but I do allow exceptions for my trusted folks.
Anyway sorry to hear about this.

[kodydog]

In order to help I need to clarify,

You say, My terms "have" always been 50% with the order. Does this mean this time you didn't get 50% down?

You say, I know I'm lucky that this is the first one. But its not lucky to get ripped off. And this brings me to my next question,

Have you contacted the furniture store face to face with bill in hand? Time to have a talk with the person who placed the order. (Bring Mugsy and Bruno with you)

About the speculation, most furniture stores pay at the end of the month. What month is a good question. Rose and my policy is payment upon delivery. No exceptions.  Because of this we work for only a few retailers. Some furniture stores jump around from one repair man to another because of their shoddy business practices.

Time to put on your bill collector's hat and get aggressive. One of the worse feelings in the world is working as hard as we do and not getting paid.

[gene]

If I get too depressed I just wait until Friday on this forum: End of the week humorous amusing anecdote (formerly Friday Funny)

Won't pay amount due. They usually pick up their items with a truck coming from their warehouse so the check has always been in the mail.

There are some customers (interior designers or stores) who want to pay me when they get paid from their customer. This is a big NO for me. If I'm working for the ID or the store then they pay me when the job is completed. Me getting paid has nothing to do with whether or not their customer pays them.

My goal is to have zero minutes spent on accounts receivable each year.

I told this customer that I work hard to provide a level of service and quality that is second to no one. I have no desire to work hard to get paid.

I got an email yesterday from a salesperson at the store wanting to know about a new job. I responded with a copy of the last email I sent to the person (one of the owners) who pays the bills.

gene

[Mojo]

Had this happen with one of our dealers. They got into us for almost $ 2 K. The wife cut them off from all future orders until that bill was paid. They paid it immediately and we no longer do 30 day net terms. Instead we require all of our dealers to submit a credit card number to keep on file and we bill that way.

In  other words it is paid before the awning is made and goes out the door.

Mojo