Billing & Collection Tip
My “journey” through the complicated, confusing process to collect money owed to our company was indeed a learning experience.
It began with the phone call requesting our side-dump trailers for a job that that a landscape contractor estimated would take 3 to 4 days – using roll-offs. Because our side-dump trailers work very efficiently, we finished the job in only 4 hours. This saved the landscaping company several thousand dollars in trucking costs.
I followed the proper steps in requesting preliminary information and sent it to all the required persons, agencies and businesses involved in the project by certified, return receipt requested mail.
We performed and billed the work in November, 2011. We all have experienced that for the most part, we get paid on time only about 15% of the time. Generally we are paid within around 60 to 90 days.
In this case I sent an invoice in Nov. 2011, a statement in December another request for payment in January, 2012 and also in February. I followed up with many phone calls all of which went unanswered (never a good sign when looking for payment). I mailed another request for payment, this time notifying them I would put a Stop Notice on the job if I didn’t hear from them in a week’s time. In other words, I took extra-ordinary steps to try to get payment.
I did not receive any form of communication from them. In March, 2012 I contacted the city in San Bernardino that was the “owner” of the job and notified them in writing that I was placing a Stop Notice on their job. They were very cooperative and helpful and informed me that this landscaping company had already been paid for that portion of the job in January, 2012. They further stated that there was still $30,000 owed to them for this job.
My stop notice prevented this landscaping contractor from collecting any of the $30,000 until they satisfied the money owed to us.
After nine (9) months with no communication from the landscaping company, I received a phone call from them requesting that the stop notice be removed. I informed them that was not how it worked – first they satisfy the lien by paying what is owed, and their check clearing the bank – then the Stop Notice would be removed.
In September, 2012, I finally received a check for the full amount owed. I sent an original “Notarized Release of Stop Notice” to the city in San Bernardino County and a copy to the landscape contractor.
This situation happens to have a happy ending. We got paid. There have been other situations where we had to take the party to court…that’s all for another story.
The most important thing about protecting your investment is following the proper steps to prelim the job. If you’re working through a broker, make sure they prelim the job.
You can also put in a complaint to the Contractors State License Board-State of California. Website: www.cslb.ca.gov.
NOTE: Although the CCTA is not a collection agency, we can guide our members with proper collection techniques, and only lead them to the legal experts for advice and support in collection of past due money.