# Dealing with a problematic client



## Rudeworks (Oct 8, 2012)

I have finished a decent sized kitchen reno worth less than 30K (CDN). Client appears to be happy with the work, in fact, seemed thrilled at times. It was a time and materials job. I billed them weekly. I sent along progress reports that outlined detailed line items with projected and actual figures. I tracked all expenses, materials, and sub-contractor costs. I marked up sub trade and material costs by 10% and billed them the marked up total. As per their request I broked down mine and my helpers hours by task, date, and duration.

Felt I had done a pretty good job of being reasonably transparent.

Now I have sent them the final invoice and their immediate response reads:

"Before we pay any more we need to see all sub trade invoices and all receipts for purchases. We are not prepared to pay for additional inspection fees as these should have been co-ordinated appropriately. The bracket fees are way too high from what we see on in the market. So we will decide what we are going to pay based on reasonableness, appropriate scheduling and market value."

Now I need to figure out the best way to respond that wont have me digging through a months worth of book keeping to produce receipts, and then having to explain the idea of markup to them, or having to eat any of the little bit of profit i made on this job.

Any guidance would be deeply appreciated.


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## Rudeworks (Oct 8, 2012)

I should also add some context to the clients message :

"additional inspection fee" refers to the added costs of having the electrical inspected that I did not budget for.

the "brackets" are shelf brackets that I supplied for some open shelves

thanks!


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## pcplumber (Oct 12, 2008)

I would like to see a copy of your contract and the actual invoices or receipts you sent your customer throughout the job. You can block out the homeowner's information, make a fake copy or whatever, but I think in a situation like this what you write on your contracts and receipts is what it critical. You can be an angel, but if you don't write contracts and receipts that make sense then you create your own problems.

It doesn't sound like your customer is complaining about much and it doesn't look like your customer wants to haggle about a lot of money. If you were honest about your subs costs then you should not have a problem. My company does T & M for huge jobs and the way we stay transparent is by sending daily reports that are detailed and we attach the receipts. While I really hate emailing things I email every report and receipt to customers on almost a daily basis. In my emails I always tell my customers that if they have a concern about something then I would appreciate their bringing it to my attention before something festers into something that cannot be resolved. I also meet with my customers when I inspect the progress of the job and I tell them this same thing in a nice way every time I meet them. The reason I email everything is so I have proof regarding everything in case we end up in court. I don't think there is any other better way to document everything other than by using emails.

Again, I am going to rub this in, antagonize everyone and push my free software on everyone. In the link below there are two pieces of software I use for remaining transparent. One is the Construction Software and the 2nd is the easiest one called Insurance Breakdown. 

Let's just say a person does tweak his costs a little (not you) and you want to fudge on the bill to make a little extra money. When you have the right software and the perfect system you can create and fabricate records that are flawless in the eyes of the receiver.

The answer to your question is; give your customer what he (or she) is asking for. Have your subs give you the receipts you need and create a flawless paperwork trail and a flawless report. When your paperwork and reports is flawless you can speak to your customer with the conviction that you are right and then beat them until they are sober and until you get paid.

You can get receipts anywhere. I would never show a customer a copy of my checking account without a court order and a high percent of purchases can be paid with cash. Also, in my reports, I will enter cash payments and note that a receipt (or receipts) are lost. This is okay as long as you can justify the delivery of the product or service.


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## TNTRenovate (Aug 19, 2010)

My guess is you don't have a contract nor did you set expectations at the beginning and through at the project. The last payout shouldn't be a surprise.


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## Rudeworks (Oct 8, 2012)

Pcplumber - I hear what you are saying. And I partially agree. Using your approach I wonder if there is a highly digestible way to sell the built in 10% markup? 

As for copies of invoices, those I can post later.

As for contract, it was simply a verbal agreement of "yeah, time and materials is cool". Which I suppose is a part of this problem.


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## Rudeworks (Oct 8, 2012)

@tnt - no contract, that's true, but cost expectations were outlined in detail from day zero. I can also post what that looks like later.


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## pcplumber (Oct 12, 2008)

Rudeworks said:


> Pcplumber - I hear what you are saying. And I partially agree. Using your approach I wonder if there is a highly digestible way to sell the built in 10% markup?
> 
> As for copies of invoices, those I can post later.
> 
> As for contract, it was simply a verbal agreement of "yeah, time and materials is cool". Which I suppose is a part of this problem.


On each line item in our software we input the percent markup.

Software gives you a grand total on top = $30,452.00

Folio 101

Saturday December 13, 2014

Mark - 8 hours x $40 = 320
John - 8 hours x $50 = 400
TOTAL 720
Markup 10% x $720 72
TOTAL 792

Email your report with a copy of the receipts up-to-date. All the receipts you get are placed in one folder and at the end of the job you can print your report and it will match every receipt in the order you placed them in the folder.

Email states:

Dear Ms. Custoner:

Attached is a current breakdown (report) for your kitchen remodel indicating the costs up-to-date. If you have any concerns regarding the costs please contact me so we can discuss them.

Thank you very much.

Bob The Builder
(424) 221-1122
[email protected]

I always put my phone number and email at the end. I know this is not necessary, but I want to rub it into their brain that I want them to contact me if there is a problem.


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## TNTRenovate (Aug 19, 2010)

Rudeworks said:


> Pcplumber - I hear what you are saying. And I partially agree. Using your approach I wonder if there is a highly digestible way to sell the built in 10% markup?
> 
> As for copies of invoices, those I can post later.
> 
> As for contract, it was simply a verbal agreement of "yeah, time and materials is cool". Which I suppose is a part of this problem.





Rudeworks said:


> @tnt - no contract, that's true, but cost expectations were outlined in detail from day zero. I can also post what that looks like later.


It's not part of the problem, but the problem. A contract is made to address these specific details.


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## Metro M & L (Jun 3, 2009)

If you have to explain your mark up at the end of the job on a time and materials project then you didnt agree to markup at the outset. In other words, you dont get mark up because you didnt ask for it. You asked for time and materials. Thats it. Thats what you bargained for. So whatever your labor rate is x the hours you worked is what you get. Everything else gets passed through AT COST.


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## Anti-wingnut (Mar 12, 2009)

pcplumber said:


> Email states:
> 
> Dear Ms. Custoner:
> 
> ...


Revisions made


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## avenge (Sep 25, 2008)

Metro M & L said:


> If you have to explain your mark up at the end of the job on a time and materials project then you didnt agree to markup at the outset. In other words, you dont get mark up because you didnt ask for it. You asked for time and materials. Thats it. Thats what you bargained for. So whatever your labor rate is x the hours you worked is what you get. Everything else gets passed through AT COST.


I agree with the above. A lot of my jobs are T&M and I can't add a markup to materials unless specified. My benefit is my customers never ask what my hourly rate is.:thumbup:


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## Metro M & L (Jun 3, 2009)

avenge said:


> I agree with the above. A lot of my jobs are T&M and I can't add a markup to materials unless specified. My benefit is my customers never ask what my hourly rate is.:thumbup:


Man, how do you swing that?


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## VinylHanger (Jul 14, 2011)

avenge said:


> I agree with the above. A lot of my jobs are T&M and I can't add a markup to materials unless specified. My benefit is my customers never ask what my hourly rate is.:thumbup:





Metro M & L said:


> Man, how do you swing that?


No doubt. I wanna know too.


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## avenge (Sep 25, 2008)

Metro M & L said:


> Man, how do you swing that?





VinylHanger said:


> No doubt. I wanna know too.


In 25 years I can't recall any customer asking what my hourly rate is. I guess based on my reputation I have the job and as long as I don't take advantage of them by giving them extravagant invoices surprisingly they are customers for life. On T&M jobs I may give a ballpark but also state that it is based on a normal installation and point out instances where it may run into extra cost.

My customers don't usually get other bids, I do it or it probably won't get done. I had a bath remodel about a year ago I estimated it at about $15k it ended up about $35k. Every time I ran into an issue I showed and explained it them, every change they made I explained the extra cost, they moved a freestanding tub 4 inches at a cost of 1.5k and ended up where I told them it should be in the first place. 

I have a bath remodel starting Monday, T&M it's an older home with all kinds of difficulty, there's no telling what I will run into, there's no room for storage, shop area, 2nd floor, etc. On this job they have chosen and delivered all materials except building materials with my input which they get charged for my time. The estimate already went up once the final decisions were made on materials and designs. They aren't getting any other bids.


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## tutone (Nov 10, 2014)

*Credit cards*

The best way to always get paid is to get paid 100% up front. Fronting someone's project is crazy and will surely lead to getting burned over and over. I started asking for 100% up front years ago and it's only like 1 or 2 clients a year who have a problem with this. If the client has a problem with 100% up front, just suggest using a credit card and their purchase is guaranteed with Visa, MasterCard, etc.... In your particular situation, I would recommend scare tactics, start with a dead fish wrapped up in newspaper on their door step, then move on to confronting the wife at the gym or grocery store kind of thing, and finally there's the banging on the door every night at 3:30 AM. There are individuals out there who you can sub this kind of thing out to if your not comfortable with it or are not experienced in violence and extortion. Have fun with them, you'll sleep better putting the pain on them. Always let clients think you're a little crazy so they know that if they mess with you something unpredictable and crazy will happen to them.


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## avenge (Sep 25, 2008)

tutone said:


> The best way to always get paid is to get paid 100% up front. Fronting someone's project is crazy and will surely lead to getting burned over and over. I started asking for 100% up front years ago and it's only like 1 or 2 clients a year who have a problem with this. If the client has a problem with 100% up front, just suggest using a credit card and their purchase is guaranteed with Visa, MasterCard, etc.... In your particular situation, I would recommend scare tactics, start with a dead fish wrapped up in newspaper on their door step, then move on to confronting the wife at the gym or grocery store kind of thing, and finally there's the banging on the door every night at 3:30 AM. There are individuals out there who you can sub this kind of thing out to if your not comfortable with it or are not experienced in violence and extortion. Have fun with them, you'll sleep better putting the pain on them. Always let clients think you're a little crazy so they know that if they mess with you something unpredictable and crazy will happen to them.


I would never ask or expect 100% up front. On my T&M job I stated above what I am going to do get 15k up front and give a final invoice for 25k?

I guess you're not in it for the long haul if you incorporate illegal/unprofessional scare tactics for your collection process.


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## Metro M & L (Jun 3, 2009)

tutone said:


> The best way to always get paid is to get paid 100% up front. Fronting someone's project is crazy and will surely lead to getting burned over and over. I started asking for 100% up front years ago and it's only like 1 or 2 clients a year who have a problem with this. If the client has a problem with 100% up front, just suggest using a credit card and their purchase is guaranteed with Visa, MasterCard, etc.... In your particular situation, I would recommend scare tactics, start with a dead fish wrapped up in newspaper on their door step, then move on to confronting the wife at the gym or grocery store kind of thing, and finally there's the banging on the door every night at 3:30 AM. There are individuals out there who you can sub this kind of thing out to if your not comfortable with it or are not experienced in violence and extortion. Have fun with them, you'll sleep better putting the pain on them. Always let clients think you're a little crazy so they know that if they mess with you something unpredictable and crazy will happen to them.


What company are you with again?


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## EthanB (Sep 28, 2011)

If there's no contract then you're pretty much left with whatever they feel like paying you. If you discussed any specifics, such as markup before the job then you had better be able to successfully remind them of that. Hopefully you have an email or text.

Be patient, be reasonable, be firm. Regardless of the contract situation, I wouldn't just take a hit without putting substantial effort into securing the payment.

Don't ever do a real project without a contract again. It's why were called CONTRACTors.


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## CarpenterSFO (Dec 12, 2012)

EthanB said:


> If there's no contract then you're pretty much left with whatever they feel like paying you. If you discussed any specifics, such as markup before the job then you had better be able to successfully remind them of that. Hopefully you have an email or text.
> 
> Be patient, be reasonable, be firm. Regardless of the contract situation, I wouldn't just take a hit without putting substantial effort into securing the payment.
> 
> Don't ever do a real project without a contract again. It's why were called CONTRACTors.


Well said.


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## tutone (Nov 10, 2014)

EthanB said:


> If there's no contract then you're pretty much left with whatever they feel like paying you. If you discussed any specifics, such as markup before the job then you had better be able to successfully remind them of that. Hopefully you have an email or text.
> 
> Be patient, be reasonable, be firm. Regardless of the contract situation, I wouldn't just take a hit without putting substantial effort into securing the payment.
> 
> Don't ever do a real project without a contract again. It's why were called CONTRACTors.


So when I go to the grocery store I can fill up my cart, throw $5 at the cashier and walk out the door cause there is no contract? No one discussed the specifics so I get a discount right?


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