# How would you handle this?



## CarrPainting (Jun 29, 2010)

Ok, heres the situation

I owe, one of my suppliers, about $600.

I know this. And, I have every intention to pay this debt.

Hell, I have even applied for a couple of jobs as an employee (work is very slow)

I have made monthly payments, on this 40-50/ month

Last month I took, out of my Home Equity line of credit, $400 to pay off another supplier, and to make a $150 payment on this other supplier mentioned above.

I have NEVER EVER stiffed anyone out of any money that I owe. Ever.

I have spoken to the supervisor at this supplier, we shall call it supplier (A) On atleast a 1/2 dozen occasions. Work is slow, I know about this debt I will pay this debt, what is the problem? 

I keep getting these letters demanding payment with in 7 days. Where am I supposed to get the money? Rob a friggin bank?! 

Its like, I am being treated like a criminal. I have sent them copies of both my business checking and my personal checking accounts showing that, I dont have the money right now... Crappy weather and stuff... I have work lined up. I am waiting on weather, I have signed contracts for exteriors... More than enough to pay off the debt, yet I cant do it due to weather...

Last month (March) I gave them $150 in cash, 5 days later, I get a letter, in the mail from (A) DEMANDING my signature on a 1099, to write off the 'bad' debt... I'm like WTF! 

I am NOT will NOT not, pay the debt... I called, and they thanked me for the payment, I told them next month I should be able to make another (substantial) payment.. I was told ok thats fine... then a week later, today, I get another letter demanding immediate payment of the full amount with in 7 days... its like now their just harassing me. Signed, by the same person I just spoke to, who agreed, that all would be fine if I made (substantial payments) (atleast $100 per month) So Now, I am like WTF! 

I have made some mistakes in the new business. I know that. I take full responsibility for those mistakes which I have made. Part of 'growing pains' I geuss. 

But this is just getting ridiculous. How would you go about doing this?


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## griz (Nov 26, 2009)

They have an aggressive policy to get money that is owed to them.

Should they ever have to go to court the ream of paper with the demand notices will get the judge's attention.

Just keep your cool & keep paying...


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## Hmbldr (Dec 7, 2011)

Like Griz said, keep your cool and keep chipping away at it. Keeping them informed also helps. They obviously have an aggressive standard form letter to send out with quick 7 day demand. As long as you keep chipping away and keep them informed, don't let the letters bother you. You're almost paid off. (it was $600, not $6000 right?) Most suppliers will work with you as long as you make effort to pay and keep them informed. They all just have different expectations and ways of communicating back with you.:blink:

Hope the weather improves to help you climb out of this.:thumbsup:


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## BradingCon (Dec 17, 2010)

That is a very aggressive collection if you ask me. All over $600? At any given time I have a $10,000 balance or more with my main supplier. I charge large amounts and make large payments. Never had an issue at all. That is crazy.


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## tedanderson (May 19, 2010)

Even though they are nice over the phone, you have to understand that the nasty letter is just business. The squeeky wheel gets its money.

If they didn't do that as a standard practice, every other credit customer would think that everything was "cool" and then that particular supplier would be the last to get paid. 

But understand me when I say that I know what it's like to be in your position where you don't have anything that you can sell, nobody that you can borrow from, and absolutely no assets that you can liquidate. And if that's the case, I am sure that the supplier understands too.. other than the fact that he has bills to pay as well. 

But let me present this question to you- And this is purely rhetorical so please don't take offense because I am not judging you or trying to give you a hard time.. but one question that I often present to people who owe me money is this:

If you were in jail and you needed $600 to get out, how fast could you get that money together?


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## packer_rich (Dec 27, 2009)

There was another thread on here about a guy trying to collect money owed to him. He had not sent any letters and didn't know what he should do. Polar opposite of your situation. I think your supplier is just covering all his bases. Even though you are making payments, he may have other accounts who are just stringing him along. It's just easier to treat everyone the same and send the notices when they are due. Sounds like if you do your best you will be good. Hope things get going for you soon.


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## BradingCon (Dec 17, 2010)

Even though you spoke to him on the phone and he said it was fine, whenever his program tells him its time to send the letter one is probably automatically generated and sent. That way he has a systematic way of dealing with collections.


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## BamBamm5144 (Jul 12, 2008)

Wow that's intense. My current balance is over 19k and my guys don't call me.

I don't know what else you can do other than what you have. Well, I guess you could never get in the robbing Peter to pay Paul cycle but I understand things happen.

You don't have any money whatsoever to pay $600? It doesn't seem like much.


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## KAP (Feb 19, 2011)

CarrPainting,

Just like you would if the situation was reversed, he's just trying to get his money. Make up a form letter/email that you send to him each time you receive a correspondence that says to the effect -* "Just a reminder, as per our conversation and your acknowledgement on XX/XX/2012, we agreed that I have paid $150.00 on XX/XX/2012 and will be making another substantial payment on XX/XX/2012, and that I acknowledge and have every intention to pay this debt as soon as possible. I value long-term relationships with my suppliers and although this is a short-term issue, it's good to know that you were willing to work with our company. Your flexibility with our short-term cash-flow issue will be rewarded with continued business. Thank you."
*
And then just send it each time (updating the numbers of course) you receive a letter from them. You both have a paper trail and unless they dispute it in writing, you have them acknowledging and agreeing to your terms to pay down the debt.

Now, if I could encourage you to get deposits and buy 100% of your materials up-front and get away from billing and collect as you go. One of the biggest factors I see alot of new businesses in our industry struggle with is robbing Peter to pay Paul and the reason they are doing this is to buy materials for the next project that is on credit and trying to pay them not because they can't physically get the work done. 

Unless you already know and own Quickbooks, open three checking accounts... one as your main account, the next for supplies and the next for payroll/taxes. When you get a check, deposit it into the main account and then disperse the monies accordingly and use these funds for those purposes ONLY.

It will make life a whole lot easier than juggling supplier accounts, admin and stress. You will know that the only thing stopping you from getting a job done is you, and not a lack of materials. Worse case, you do all the work yourself, but at least you know you can get it done because you have all the materials.

Best of luck... 8^)


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## tedanderson (May 19, 2010)

packer_rich said:


> I think your supplier is just covering all his bases. Even though you are making payments, he may have other accounts who are just stringing him along.


True. And I also consider that if the supplier has creditors that he has to answer to (private or otherwise) it shows his due diligence that he is making an active attempt to collect his debts.

Also I imagine that in the profit/loss statement at the end of the year when the supplier has to write off his losses, the letters serve as supporting documents that he indeed wanted to collect vs. just letting it go.

But I still think that it's good that you are staying in contact with the supplier and paying what you can when you can consistently.


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## Chris Johnson (Apr 19, 2007)

Why haven't you paid the supplier? Where is the money? Did you not get paid for the job in which the materials were supplied for?


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## carolinahandyma (Jan 6, 2006)

Chris Johnson said:


> Why haven't you paid the supplier? Where is the money? Did you not get paid for the job in which the materials were supplied for?



Chris makes a good point.

As far at the letters go. They may be auto-generated by a computer and go out in batches periodically to anyone with an unpaid balance.


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## Diablo View (Apr 10, 2011)

KAP said:


> And then just send it each time (updating the numbers of course) you receive a letter from them. You both have a paper trail and unless they dispute it in writing, you have them acknowledging and agreeing to your terms to pay down the debt. 8^)


Just because they don't respond does not mean they agree with you.


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## Pearce Services (Nov 21, 2005)

Have them put your current balance in writing, and a payment plan of say $100 per month, with them putting a plan in writing, you can ignore all the other BS. 

I would bet that at the local level, they are working with you and value your business, but at corporate, they are just following protocol.


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## KAP (Feb 19, 2011)

Diablo View said:


> Just because they don't respond does not mean they agree with you.


Yes indeed, but if it ever went to court, it would hard to argue that they didn't agree if they didn't dispute it and kept accepting payments... either way, the communication chain is open and there is movement on the balance.

My guess is he is stuck in a rob Peter to pay Paul cycle. There is only one REAL way out of that cycle... get deposits, pay cash as you go going forward and terms with your creditors that you owe... 

IMHO, since robbing Peter to pay Paul cycles are one of the MAIN culprits for not getting jobs done, if $600 is that much of an issue for him, he would be better off going cash for all future jobs until he has at least 6 months of capital reserves and 3 months emergency fund established before he even thinks about using supplier credit as a management tool.

As a business owner, his attitude towards this - _*"I have spoken to the supervisor at this supplier, we shall call it supplier (A) On atleast a 1/2 dozen occasions. Work is slow, I know about this debt I will pay this debt, what is the problem?" *_- reflects poorly IMHO... Something for him to consider is if the supplier has 10 guys in the same boat, because "work is slow" the supplier would be floating $6000... If it were me, I would not only be paying him the balance asap (which I get the feeling he will), but interest to boot as a thank you for floating the balance past the agreed terms. Treat others as you would like to be treated.

It also underscores the need for PROFIT in a job. This is where your capital reserves, emergency fund, equipment purchases, etc. come from. Unfortunately, alot of guys think the "profit" in a job is what they pay themselves with, it is not... which is why we have so many who price incorrectly and try to buy business and it affects the industry as a whole.

Unfortunately, that's not going to change anytime too soon... :no:


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## wellbuilt home (Oct 22, 2007)

I would not worry to much about the letters , You cant print the money .
Keep paying every month . 
Pay off the debt asap and move on . 
Glad to here you have some work lined up. 

It seems like the North east is going to take a beating this year . 
It very slow here . 
Ive had myself and 2 guy working every day since 06 when i opened shop in this area and i'm now just about out of work ? 
hang tight John


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## southernyankee (Feb 21, 2011)

The way I see it is if you keep making payments no one is going to take legal action.
May be only $600, but that's a week's pay for the fork truck driver, secretary, material handler.
Good with things. Remember: it will pass.


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## JBM (Mar 31, 2011)

I would advise from charging your stock in the future. Get some money up front, pay for what you need and at the end of each job its a clean slate.


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## pinwheel (Dec 7, 2009)

I haven't read everything posted, so I may be echoing someone else. My question, why didn't you pay your suppliers when you collected the money for the supplies you bought from them, from the job you bought them for? If you had done it like you most people in business, you wouldn't be in this prediciment. If in the future, you choose to follow this practice, you won't find yourself in this spot again. 

Suppliers don't tolerate this kind of practice for very long & keep selling to you on credit. Personally, I value very highly, my ability to pick up the phone & say send it & know it's going to be here before I need it for the upcoming job.


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## BradingCon (Dec 17, 2010)

I know that the rules on this vary from state to state, but one way to avoid this in future is to begin to take an upfront payment from your customers. State in your contract that you require xx% of costs upfront. When you collect this amount, immediately go and purchase the materials for the job.


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## Scribbles (Mar 10, 2009)

Find a job, you aren't ready to run a buisnes.


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## TNTRenovate (Aug 19, 2010)

Chris Johnson said:


> Why haven't you paid the supplier? Where is the money? Did you not get paid for the job in which the materials were supplied for?


I am in 100% agreement with Chris. My first thought was, you got paid on the job, why shouldn't they?

I know that I get upset when a customer doesn't pay and I have to wait and wait on a job that I have already paid out on. My suggestion is sell or pawn anything you own to pay them.

Do you have cable? Do eat out? Do you smoke? My feeling is if you can afford any of those, you can afford to pay them. :thumbsup:


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## Texas Wax (Jan 16, 2012)

Dave ramsey advice------Get a job delivering pizzas.

Not paying vendors is in the end theft. Reality, stuff happens, but your vendors get paid up front or *first*, before employees, taxes, and of course yourself. 
$600, seriously do you believe they would would pay a lawyer $250/hr to collect if you are making reasonable payments? These are, as already stated, squeeky wheel get the oil letters. So cut yourself a little slack. Keep chipping away at it, keep looking to increase income and it will pass, with suckage, but it will pass.


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## fast fred (Sep 26, 2008)

I don't understand, I must be missing something.

I think I'm just going to go shopping today. It's just one of those days.


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## tedanderson (May 19, 2010)

TNTSERVICES said:


> Do you have cable? Do eat out? Do you smoke? My feeling is if you can afford any of those, you can afford to pay them. :thumbsup:


That's the main reason why I presented the "if you needed $600 to get out of jail" scenario. I really hope that you truly don't have this money and you aren't just forgoing payment to the supplier while you still enjoy some of the other luxuries of life. 

One thing you never want to do is burn a supplier. Not only does it make you look bad and make it harder to get credit anywhere else, but it makes things harder on the rest of us who DO pay and have to be put through the ringer every time we want to open an account.

The sooner that you get that supplier paid off, the sooner he'll forget that there was ever a problem.


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## fast fred (Sep 26, 2008)

I went shopping now I feel better about myself.

Are you kidding me?

For real? You posted something like this?

Here is my problem. I had 8,000.00 in my checking acct at the begining of the month. 

My personal bills are all due around the 10th and 15th of the month.

I had 14,000.00 in bills payable by the business by the 15th.

So I'm 6k short right, Yet I have 11,500 billable and recievable due. 

I start paying out the business bills asap, need the lines of credit to succede, need subs to know that they will get payed so the will show up to work and bend over backwards for me.

The money starts rolling in and keeps going out to keep up with the business expenses. Mortgage is due by the 15th at the latest, guess whose bills get paid last, at the very last second seeing as how today is the 15th, I coulda paid the mortgage on the 1st like I was suppose cause the money was right there, but I'd rather make sure all my business expenses were paid before I got paid. Even though I had the money sitting right there in front of me!!! I'd rather be late on my mortgage, pay a fee, get a possible blip in my credit report, than tell a sub or a supplier that I'll get to them, give me a second. I can't be #1 without them. I don't ever want to look like a chump. 

I've seen countless contractors go down or lose respect because they didn't pay. It's sad when your sitting at the desk of supplier and they let it slip that so and so's acct. has been closed, to me that's one less competitor.


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## Tom Struble (Mar 2, 2007)

from what i understand from my friends in supply houses the op isn't the only one


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## Ethos (Feb 21, 2012)

Just stay in communication and try to talk to someone who has the authority to establish the terms of your repayment. There's really not much they can do to you over $600 other than ruin your credit with a collection claim. It's too small of an amount for a practical institution to go to court over, and you've already shown that you're steadily paying it off.

Now I want to be clear that I'm not trying to lambaste you here, but rather give you some perspective. It's concerning that you are so shocked about the supplier being so confrontational about you not paying in the agreed upon time frame. Being late on a payment is frustrating for any business, and bill collectors around the world will tell you that an aggressive strategy is the best. The second they cut borrower some slack, the imperative to pay it off is lost and it gets put on the back burner. 

Put yourself in their shoes: Let's say you finish painting a house the the HO told you, "Sorry, I can't pay you the final $1000 I owe you right now, but I can pay you $100 per month." You'd be livid! That doesn't help you, because your business model is not that of a credit company, where you are set up to make a profit via interest. You have bills to pay, and so does your supplier.

In the future, you should:

1. Get your material funds up front. (I require the materials as a down payment, plus whatever I figure my payroll for that job will be until the next phase should be reached.)

2. If you're working for someone who won't get you a down payment for materials, like a commercial service management company, then you need to have a business credit card or something along those lines to float you along where you have the flexibility of making a minimum payment and keep your credit in good standing.

3. If getting a credit card isn't an option because of bad credit, then you need to save money to create a buffer to provide your own credit to yourself.

I know it aint easy, but that's business.


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## TNTRenovate (Aug 19, 2010)

I suspect that the supplier might have a different story to tell. Not that the OP is lying, just only telling his side from his perspective.


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## skcolo (May 16, 2009)

Not to be uncaring, but if you can't come up with $600 and you are in business, you have bigger problems than a supplier. I would get a job delivering pizzas at night to get him paid off.


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## Tom Struble (Mar 2, 2007)

TNTSERVICES said:


> I suspect that the supplier might have a different story to tell. Not that the OP is lying, just only telling his side from his perspective.


well..how could he do otherwise?


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## TNTRenovate (Aug 19, 2010)

Tom Struble said:


> well..how could he do otherwise?


You have never stopped and tried to see the other side of a situation? Reflective thinking? :thumbsup:


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## Tom Struble (Mar 2, 2007)

i try an then my head hurts:sad:


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## Chris Johnson (Apr 19, 2007)

I'm still wanting to know if you got paid for the job in which this material was procured for


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## TNTRenovate (Aug 19, 2010)

Chris Johnson said:


> I'm still wanting to know if you got paid for the job in which this material was procured for


I second this motion. It's now on the floor for questions. :whistling


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## Scribbles (Mar 10, 2009)

This really bothers me, I paid a supplier late once, it was about $1,500, the builder went bankrupt on me and stiffed me for 9k, it took me 18days, I did not pay my morgage or any other bill's that month until the supplier was paid. And I was at the supplier the day I found out, and have him all details as well as a list of my receivables for the next 30 days, and felt like ****. He wasn’t worried about it and we still have a great relationship to this day.

Screw you suppliers and you f-ed. Simple as that.


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## Tom Struble (Mar 2, 2007)

and you never f ed something?really...never?:shifty:


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## Scribbles (Mar 10, 2009)

I’ve been late on my car payment, power bill, late on rent, short on my tithe. But I have paid every employee in full with all overtime mileage, exe. And I have payed every supplier in full whether I was paid or not.

Take care of your suppliers, and take care of your employees. It's as simple as that in my book. If I f-up is me that suffers not them. I have screwed up a lot in that last 5 years; buy it’s me and my family that pays not them.


It's my screw up not theres.


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## Tom Struble (Mar 2, 2007)

mmmyea ok


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## overanalyze (Dec 28, 2010)

We still don't know if the op was paid up front. It also sounds like he is paying personal bills out of the same acct as business bills. Not sure if that's the case just how I read it. If that's the case he may not have a clear understanding as to how much is truly coming in and going out. Separate your accts. Get some decent bookkeeping software or setup some excel files at least to track where the money is going. It will help you establish a lot of info about your money situation. No one here will sugarcoat it for ya...$600 bucks...really? 

Now if you have not got paid from that job yet, then hopefully you filed a lien. If you file a lien make sure you present all that documentation to your supplier. Keep them in the loop in writing as to what's going on!


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