Payment schedule


#1

When is the timing of payments when getting roofing/contracting done?

Is the norm - half down, then the rest at time of completion? all upfront? all upon completion? ever offer financing?

Seems like a fine line where either the homeowner or contractor could get burned! and I bet its happened!

Just curious as I may have a small project done in the near future!

Thks


#2

Something like 1/3 upon start, 1/3 upon middle of job and 1/3 billed after completion.


#3

Hi,

We get $100 at the signing of the
contract. Half the Friday before work starts. Balance upon completion. That is for residential.


#4

We do 1/3 at signing, 1/3 the day we start and 1/3 upon completion. Never had any problems with non-paying customer. Sometime we are a little flexible on the 1st payment, but the schedule stays the same, so like we can do 1/4 at signing and go 37.5% at start 37.5% at finish.
Also residential only. Commercial is a whole different game. Some do Net 30/60. Some 33/33/34% some finance… it all depends.

I’d NEVER do 100% at completion, as i heard of too many horror stories of contractors getting burned. People just did not want to pay AT ALL - freebie lovers i guess.


#5

for me it depends on how well i know ya and how much money i have at the time.

half up front usually covers the materials, and a couple a hundred to get things started.

nothing wrong with roofing the structure with
the owners money, not yours.

gweedo


#6

Since I’m a one man band (& the wife keeps my bank account on the low end), I usually get the customer to cut a check directly to my supply house(s), less about $ 100.00 or so in case I want to do a return & get the credit back in my name vs. the customer.

For specialty metals (crickets, oversized modified metal, chimey caps, special sized drip edges, dead valleys) if the cost is under around $ 50.00 then I’ll usually pay this amount myself (wrapped into the job, of course).

Balance (total, less any parts deposits) is due immediately upon completion, + any extra repair costs for “hidden damage” or “as discovered” repairs.

This lessens my damage on the “up front” side & should anything ever go wrong with a project, @ least I’m only out labor & not parts as well. I can make up the difference to my crew over time, but parts; that’s a problem.

So far, I’ve only had one customer that I’ve had an issue with. An insurance repair from last year, some extra work, & she owes me ~ $ 1,100.00+… labor has been long since paid. I’ve got a lawyer taking her to small claims for me; all for the cost of a BBQ lunch we did 3 weeks ago.

Back to the original post: The way I see it, if a customer isn’t able to / interested in paying some kind of a deposit (whether to me or the supply source) then they probably won’t be able to / willing to pay the cost for the total job when done.


#7

I have the home owner cut the check for the materials to my lumber yard and I bill on completion. If the materials run short which is rare pay out of pocket and if extra goes in my pocket. Had a couple home owners ask why he wasn’t getting the money back for the extra materials and had to explain I did the work for said amount and not by the square.

Did it this way for my accountant’s roof last Spring and he thought it was a good idea.

If I really want to get on the job fast and the home owner is still waiting for the insurance check I’ll pay for the materials. Only do this when I’m 100% confident with the home owner. Did about 7 or 8 this way last year.

On the new stuff I never buy anything besides nails and tacks.


#8

Dougger, you & I are on the same battle plan except I’ve decided to NOT pay any major amounts towards material.

The one customer I’m having to sue owes me for labor charges, so as stated - @ least I’ve been able to make this amount up to my crew. If I had to (potentially) eat labor AND parts, I’d be contemplating a visit & start peeling Tamko Metric 30’s off her roof.


#9

[quote=“RanchHandRoofing”]Dougger, you & I are on the same battle plan except I’ve decided to NOT pay any major amounts towards material.

The one customer I’m having to sue owes me for labor charges, so as stated - @ least I’ve been able to make this amount up to my crew. If I had to (potentially) eat labor AND parts, I’d be contemplating a visit & start peeling Tamko Metric 30’s off her roof.[/quote]

The most I paid towards materials in 07 for one job out of pocket was less than $3K. Most were only $2K, small roofs. You may think I’m crazy but don’t recall any of them signing contracts either, lol! All were paid in a very timely matter. Most were the home owners that call me when they get their insurance check rather then me having to call them asking if they’ve been paid yet. Guess I got a good read off them.

I just deposit a check for a new roof I invoiced on 6/26/07, $4,500 labor. In Jan. got paid for four roofs I did last Summer. Finally made the call to the insurance company a couple weeks ago to release the funds for a roof I did last September. They got my invoice but since it was $100 more than what they agreed to pay (permit amount) they decided they were not going to call me to explain. Called the home owner after waiting for too many months for money and was amazed what they told me. The in house adjuster confirmed what the home owner said. Felt like calling the home owners to give them my insurance agents number!

Try the courts before you tear off her roof again. Legally you could be in more trouble for tearing off the shingles you bought than her not paying for them or the labor. I hear you though, it can be frustrating. The first time I got stiffed didn’t sleep well at night for quite a few weeks, it ended up only being $1,500 for labor. My wife was not happy either as it changed my mood for a while. These people will get what they have coming sooner or later.

BTW, my wife and I have separate accounts. :roll:

She just called me from work and said, “You can buy the GTO”. Now I’m happy, 1969 GTO 400 4spd!!! Wanted a muscle car for way too long. :smiley:


#10

#11

Ranch

In Ohio we can file a lien on the property for whatever said amount.  We Had a customer that owed us about $2700. I filed a lien for $34000.00.  When he was notified by the county office that he owed me $34000.00.  he said I don't owe that much.  The county and myself said well then hire an attorney and prove otherwise.  In addition I told the homeowner that if he paid me the $2700.00 that I would release the lien in full.  
 Now Mr. Customer knows that he owes me $2700.00 if he hires an attorney that will cost him even more money.  If he tries to sue me I will counter sue for what he owes me and I will win.  Not to mention he has no case and he is the one that owes.  I did nothing wrong ahve no worries if he tried to sue me.  So eithier way he has to pay the $2700.00 and maybe more. If he  doesn't do anything he always owe me $34000.00.  Therefore he can't ever refinance his house and it will go on his credit.
 He did pay me the $2700.00 shortly after I filed the lien.  We gave him a reciept for the money and removed the $34000.00 dollar lien within the required 1 month time period.
This forces the property owner to act in some way.  Most people will not ignore a lien on there property for that much money.

#12

As stated /, “I’ve got a lawyer taking her to small claims for me; all for the cost of a BBQ lunch we did 3 weeks ago.”

There are a few headaches with a lien OR a judgment in small claims:

Lien: If the customer intends to stay in their house for a LONG time, they can just wait you out. Now granted, a lien sits there for perpetuity, however if the customer wants, they can simply let their estate worry about the details once they have passed away. If they for some reason get their house repossessed, you have to get in line with a bunch of other creditors.

Small Claims: Once you win, you have a nice piece of paper. Collecting on it is a whole different story.

As contractors, what we’re counting on is that the customer will get unnerved by either of these scenarios & simply pay their bills like we’d like them to.


#13

[quote=“shinglehitter”]When is the timing of payments when getting roofing/contracting done?

Is the norm - half down, then the rest at time of completion? all upfront? all upon completion? ever offer financing?

Seems like a fine line where either the homeowner or contractor could get burned! and I bet its happened!

Just curious as I may have a small project done in the near future!

Thks[/quote]

That should all depend on the size of your company, your credit, length of project, and your willingness to “finance” a job. If it is a shingle job where you will be done in a couple of days, and you have good credit, you may want the material cost up front and the rest upon completion. If it is someone that doesn’t look totally honest or financially suspect, you may want more up front. If you are dealing with commercial roofing, you will get paid in accordance with the owner’s pay schedule for bills, which could be monthly. There will be retainage, and you will likely have to bill off of a schedule of values.


#14

Payment terms are something that each contractor will have a different opinion on.

It also is something that can usually be negotiated slightly with any contractor.

Personally, I like a 33% deposit to guarantee the scheduling slot, in the event that the home owner has a change of mind, right before we are scheduled to begin the roofing project. Who pays for the lost time and lost profit if there is no security involved.

Also, I feel that short jobs can maintain less of a percentage of completion payment schedule, but from my point of view, I prefer to collect the next 33% upon, or at least shortly after beginning to work on someones home. There has been good faith applied by our company and crew to schedule and order materials and labor at this point in time.

If there are additional work change orders encountered, I like to get them signed immediately, and then collect on them upon completion of the change order, although I may defer those payments into the final lump sum payment due.

Even if there are minor defincies, real or imagined by the home owner, no more than 5% to 10% should be held back from the final payment, as long as the roof is performing as per its intended purpose. The exception to the 5%-10% would be if the cost of remediating the supposed punch list problem has a price tag higher than those amounts agreed to.

From a home owners perspective, hold off as much money for the final payment as possible, within reason, to ensure satisfactory completion of all contractually agreed upon specifications and details.

From a contractors perspective, a home owner will always over value the dollar amount of any punch list remediation work required.

Find an agreeable amount prior to agreeing to the contract terms, which both parties can live with comfortably.

Ed