Payment terms - how much wood to cut before payment

[WV Sawmiller]

All,

    How much wood do you cut before requiring all or partial payment?

    I plan to hopefully cut mostly on client sites as I don't have a lot of spare space or support equipment to move lumber around piles here on my place. Also I think there is a bigger market and I can be more competitive (I don't think or plan on underpricing but think I can provide faster responses) here for on-site sawing. My concerns and worry is that I may cut a big pile of lumber and have trouble collecting. I don't really want the lumber so re-possessing lumber for payment is not attractive. I am not sure yet how much of the time the client will be available to help (I'm naturally thinking different rates for assisted sawing vs me doing it all myself). I'll try to keep the client appraised of the lumber cut so he can keep track of what he will owe and not be surprised. Also if I have to hire help and such I don't like the idea of going to deep into my pocket before collecting when cutting - basic cash flow issues.

    Do you guys ever run into problems collecting on large jobs? Do you require payment to date a certain points to keep from getting the client too deep in debt? Any advice and suggestions will be appreciated.

[Peter Drouin]

Get paid in full at the end of the week. And the next week. Don't charge less if he has help to help you. Price it like you're all alone.

[POSTON WIDEHEAD]

I am stationary. When I custom saw a job, I require a trailer or truck to be left. As I saw.....I load. When I get a load, the customer picks it up. He is given an itemized BF sheet and he pays.
If they don't come to pick their lumber up....I have a truck or trailer and a whack of lumber.

[drobertson]

Get paid in full at the end of the week. And the next week. Don't charge less if he has help to help you. Price it like you're all alone.

Pretty much says it all,,

[longtime lurker]

It would be best to assume that around 40% of jobs will be paid on time, 40% will be paid reasonably promptly, 10% will arrive one day sooner or later, and 10% will be never paid at all.  Maybe not quite that bad but trust me... if you saw for enough people you'll always get taken by a few of them. Depending on prompt payment of every bill to meet your overheads is a fools paradise in any business

Being paid in timber is the least of your worries... or at least beats being paid not at all. the problem with sawing at a customers site is that after its over you cant really hold the timber pending payment.

[Peter Drouin]

One time I had a guy give me a rubber check, I called him, And he would pay in cash and I will give him his check back. When he saw my chainsaw in the back of my truck, He said nice saw, I said, yeah, I was going to finish cutting your lumber If I did not get cash. :D :D :D :D

[Larry]

I went on a mobile job last year.  Customer said about 2,000 bf so I figured I would saw it all and get paid.  At the 2,000 bf mark customer said he had more trees than he thought.  Said just a few more.  At the 12,000 bf mark I was done.  A sizeable bill at this point and the customer was out of town on business.  When he got back said he didn't have the money for all of it, so paid me for 3,000 bf and paid the rest a little at a time over 6 months.

Do I look like a bank?  I certainly don't want to be in the banking business.  Last time for that mistake...on to the next mistake. ;D

[POSTON WIDEHEAD]

One time I had a guy give me a rubber check, I called him, And he would pay in cash and I will give him his check back. When he saw my chainsaw in the back of my truck, He said nice saw, I said, yeah, I was going to finish cutting your lumber If I did not get cash. :D :D :D :D

Oh my Side...... :D :D :D :D....You're killing me...... :D :D :D :D........but I love it!  :D :D :D :D

[WV Sawmiller]

Peter,

    Thanks for the advice. I'll advise payment weekly or upon completion, whichever comes first, advise of price and maybe give a discount if they show up with help but not be waiting on trying to chase down help. I'll keep my chain saw handy too.

Larry & Longterm,

    Your experience is exactly what I worry about.

PostonLT40HD,

    I had already incorporated in my draft contract the recommendation they leave a trailer, if possible. Also I offer "while your wait" and hope lots of folks with just a log or two schedule and bring logs and leave with lumber. That way I know I don't have to double handle anything and I know I have a helper there. Good suggestion and I'll push for that more.

[Tree Dan]

I love that one too :D...get the cash Bro....
What about getting a deposit for the bigger jobs?

[Delawhere Jack]

C.O.D, make it known up front, payment on completion. No more than one weeks work without a check. I've been very lucky, most clients pay in cash, and about 1/3 pay by check. Like Larry said, we're not in this business to finance other peoples projects. Be sure to mention before hand that you don't take credit cards.

[Red Good]

Anyone looking at or using Squared ? A banking app for your phone . takes it instantly from their card and deposit's it in your acct ? For a fee of course but at least you get paid .

[YellowHammer]

I use a credit card machine  (Square) in my iphone to take deposits or partial payments before any sawing job over $1,000, sometimes less if I get a bad vibe.  Everybody takes payment differently, I tell people face to face, right up front, I get paid by cash or charge only, because if they don't have a good credit or debit card, and don't have cash, then I sure don't want their check.  Being paid by cash or plastic lets me get my money instantly, real time, and I have had a few people hand me dead cards, but they always manage to dig a little deeper and find one with money in it when the machine says "denied."
YH

[Brucer]

It depends. If I'm sawing at my site and providing the logs, I will ask for an up-front deposit and progress payments as I go. No deposit required for orders under $3000. After that it's 30% up front. The final payment is about 10% and is due after the job is complete. I can adjust it up or down if the customer made any changes during the job. The important thing when I'm supplying the logs is that I have the cash flow I need to buy in more logs as a job progresses.

For sawing the customers' logs, it depends to some extent on how well I know the customer and how busy I am. I typically ask for progress payments on really big jobs, especially if I have a backlog of jobs waiting for me.

I have only been shortchanged once. It was a small job for a repeat customer. The job was done, the customer notified, and her husband was going to arrange to pick it up (and pay me). Two weeks later I touched base and her husband was "supposed to have picked it up." Two weeks after that it was "sorry, we just split up, I've left town, and the project was for his relatives anyway." Sigh. It was an oddball size that wasn't easy to sell, but I've got rid of about 3/4 of it 4 years later.

I found it was useful to have a threshold for taking a standard deposit. That way I can tell a new customer that these are my standard terms, and the person won't get the impression that I don't trust HIM (or HER).

[terrifictimbersllc]

My agreement says I"m paid by cash or check before I leave the work site, unless the job is to be continued the next day.  In 7 yrs I've not been paid only several times, because the customer forgot the checkbook, or left early,  then it was mailed promptly.  Two checks bounced with great embarrassment to the customer and again promptly replaced.

[Chuck White]

There are some sawyers in this area who will go in with the customer and scale the logs and get paid "half" in advance of setup.

If you have customers you don't know, you would be well advised to use the standard sawing contract.

[Magicman]

I am completing my 12th year of sawing.  I get paid at the end of the job or at the end of the week if it is an extended job.  I have never had a cross word about billing or failed to be paid.

[backwoods sawyer]

Like MM I get paid at the end of the job or at the end of the week if it is an extended job and have never had a cross word about billing.

In over 8 years I have had a one check bounce, his second one cashed. Two larger jobs that were not paid in full at the completion on the job but were paid up within a month (this was not pre arranged). One the check is in the mail for a week and a half (local mail service is one day) and I have one customer who is going on 2 1/2 yrs, he stopped in a couple months ago to let me know he has not forgotten :

Kinda like the honey vinagar thing, you don't start by hitting them over the head and pouring vinagar on the wound then bandge with honey or something like that ;D   northern, southern and eastern versions may vary some ;D

[Shotgun]

A properly written contract will eliminate these types of concerns.  Hope you're considering the use of a contract.

[red oaks lumber]

been doing this for 18 yrs never has a contract and probably won't start, if your requirements are explained up front and you hold firm then no issues.i always get 50% down and if they sqauck i walk.
last wweek  customer was inquiring about us do work ,i explained the 50% down, their response was we don't do that . my comment back was nicely if you want us to do the job you know out excpectations so , let us know if we can help. still haven;t heard back. if they have a problem with half down i' m thinking they will have a bigger problem with 100% at the end.

[Magicman]

My Sawing Contract spells out the sawing rate/method, travel & setup fee, site setup & required help, payment, and maybe more importantly a disclaimer for any personnel, spectator, or mechanical accident or injury.

[bugdust]

I have been sawing since 1997, and this year was the first time I got left holding the order. To make things worse I knew both individuals. Never questioned the first, the second I wasn't really shocked after all. Was left with 2000 BF of hemlock lumber, have sold some, and will probably use the rest. I still don't plan on asking for partial payment from people I know, but total strangers will have to cough up at least half.

[FarmingSawyer]

This has been something I've wondered a lot about myself....what happens if the customer doesn't pay. If I'm at the customer's site, and after giving them a quote and upfront expectations, they still don't want to pay, I'm not adverse to cutting up their lumber (or threatening to) into firewood before heading out. IF they leave logs for me to mill, well, I tend to mill more expensive stuff at my own place, so I guess hanging on to it for payment or sale isn't so bad.....

Fortunately I have had really good customers. Some of them are becoming repeat. It helps to learn to read people...... I didn't do that so well last winter on a logging job. Got taken for a ride. In fact, I just got back from court, again, without any satisfaction....even after I was awarded a partial payment for work completed. Only a third of what was owed, but it was something. However, fees are eating away at any sort of profit and I'm feeling like there is no point grinding this one into the dust.... Just chock it up to experience and hope Karma bites the other party big time......

[Delawhere Jack]

Cutting up or burning the deadbeats material would just make you guilty. It's tempting, but it won't get you paid.

One tip off I've found is when people question your rates beforehand. They're the ones who will want to "get a deal" when your done. I absolutely will not reduce my rate unless it is a job that will take several days, and only then if I think I might lose the job.

On occasion, I've googled the name or phone number when I was suspicious of a prospective client. You'd be surprised at the court records that are posted online these days.

[petefrom bearswamp]

I'm stationary and trusting of human nature.
Have had a few orders that were not picked up but sold the down the road.
Never have been stung by a bad check.
IMO cash is king.
Have had some customers try to Jew me down ( not a politically correct statement) but they saw the light when I said "just walk away and I will sell to someone else"