Customer did not pay an electrician for good work. GC won't pay electrical contractor
How to get customers to pay up?
How to make sure your customers always pay for the job well done.
How do I make sure clients pay me for the good work?
Follow these steps to get paid.
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I try playing a good guy first. I set up a monthly payment plan of $50 or $200 a month plus an interest within legally permitted limits. I only want to get tough after the friendly approach method gets blown off.
Mail or email a bill to a crook monthly. Then, after three months, file a small claim. Pay a lawyer to write a letter threatening legal action. Get a lien.
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Your next step, after the very first phone call and before giving an estimate, is collecting and verifying their personal info like real full name, email, address, other contact info, etc. Then prepare a detailed contract covering all your weak points. You omit one, they will hit you right there.
Do expect every customer to act like a criminal or a pig and you will never be disappointed. It does not mean you need to be rude or else. Just be careful and do not trust anybody. This way you will avoid most of bad customers and lose just a few of good ones.
Many of these folks are career offenders and, in fact, criminals. They know how to work the system and abuse you. Their strongest weapon is becoming a silent invisible ghost. They never reply, never pick up the phone, disappear not to be ever found or reached, they keep complete silence and hang up or calmly walk away if you found them.
We, as contractors, need to know how to work that system as well. If we do not sacrifice time and effort trying to punish them, they become even more brazen and vicious. Your inaction will multiply the number of their victims. If you consider yourself a good person, do everything you can. Step over yourself and go after every one of them.
But keep in mind that honest clients also need to be careful with you. They just do not know you are a good electrical contractor and an honest person. So ask for just a 30% upfront payment for materials and get the rest upon your arrival with the materials.
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If they don’t pay an upfront deposit, we don’t start working.
We agree in advance and set up in writing interim payments at particular milestones and as often as it makes both parties conformable. Depending of the project size it could be hourly, daily, weekly, etc. amounts based on the value of work that has been completed. Such interim payments are 1% to 15% lower than they should be. These temporarily unpaid amounts accumulate, it's kinda customer insurance that contractor won't disappear for good after getting such partial payment.
The accumulated unpaid amounts must be received one hour, one day or one week before the job completion. So we stop just short of completion. No one gets the final product before the invoice is paid in full.
If they don't make an interim payment, we stop working. No exceptions, never. Hefty penalties get activated right away as per the contract. It’s extremely simple and always works.
If in doubt, we never start working until we get prepaid for. And we never begin work until the money agreed upon changes hands.
We have made up our mind. We lose bad customers before we lose any money. And we just forget it.
Some six years ago we've ignored these rules a couple of times. We lost a couple of bad customers, lost money and got a whole spectrum of nasty feelings, wasted time, bad experiences, negative thoughts and emotions.
The choice is absolutely clear! This electrical contractor (in Toronto) has NOT been screwed five years in the row!
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Tips to make sure you get paid by every client.
What to do when a client does not pay up.
How do you secure the payment in full?
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