From the Resene Trade blog - Resene Professional development programme
When an account becomes ‘overdue’ always contact your customer and ask for payment
If you don’t and ignore the problem technically, you don’t have a ‘bad debt’ anymore because it simply becomes impossible to undertake any recovery at all.
Apart from commercial failures (bankruptcies) that occur from time to time the problem is full payment for your work rather than ‘bad debts’. Painting is a finishing trade and substrate problems have a nasty habit of translating into painter problems, that require considerable reworking, that leads to added expense (often disputed) and delays to payment.
An additional difficulty is that there is a casual ‘best price’ bidding system and many quote, correctly to actually perform the painting systems, but without any regards to contract conditions and/or projected time frames.
Any legal action you instigate for recovery of monies due takes time and trouble and money to carry out, so be absolutely sure:
In addition to prices each quotation should describe the preparations and painting systems and proposed materials.
Also include your terms of trade and particularly your payment requirements (sometimes of course these are prescribed in specifications you respond to).
Verify your liability insurances and health and safety protocols, clearly indicate any licences and qualifications held. While this may seem tedious and unnecessary with customers known to you it remains that occasionally things will go wrong and inclusions of all that is needed covers such contingencies. Also it is an excellent marketing strategy compared to casual responses.
Mostly inclusions of every type can be available as a ‘cut and paste’ basis. Reducing your credit cycle is sensible.
Ask customers (in your quotation) for a deposit.
This, of course, eliminates tyre kickers, is also often seen favourably by customers because your services are secured and the payment for your work is spread out.
The painter’s benefits are the provision of immediate cash flow, the contract is secured and your contract terms confirmed legally.
Ensure your terms of trade are clearly stated – if you need weekly payments, state this requirement within your quotation.
Exceptions to this are when you respond to specifications (and contract conditions) offered by Architects, builders, property developers and managers etc., where the conditions of performance and payment etc are (or should be) stated.
Painters often may not be able to operate within some commercial markets simply because the funding requirements become too high due to retentions, guarantees and the longer payment terms (on average 70+ day credit cycle is typical).
Painters are in the credit business!
(thereinafter referred to as “the Contractor”) written quotation shall be deemed to interpret correctly the Customer’s instructions whether written or oral and the Customer is accordingly advised to exercise due care in checking quotations. Any additional work not quoted for shall be carried out at the Customer’s expense. The term “quotation” shall include estimates for the purposes of these Terms of Trade.
In offering to carry out this work, the contractor undertakes to exercise all care in minimising any possible damage to the customers property or to surrounding property.
Safety – The health safety and welfare of all persons working on site is the foremost consideration for the Contractor. To this end all responsible practical efforts must be made to create and maintain safe working conditions, in conformance with H&S 19 – When, in the opinion of the Contractor, an unsafe condition exists or an unsafe act is being committed (provided such is not caused by the Contractor), you will be instructed to take appropriate action to rectify the situation. Failure to do so will result in the Contractor applying whatever measures are considered necessary to ensure conformity with the above requirements.
Payment Terms – Unless stated differently on the front page of this quote, the payment terms are as follows:
(a) Payment of the Contractor’s account including all additional charges is due in full (i) for Residential work within seven (7) days from the completion of the work: and (ii) for Commercial work by the 20th of the months following the completion of the work.
(b) The Contractor reserves the right to charge interest on any payments not made as above at the rate of 2% per month.
(c) The Contractor may at any time require security for payment and may withhold delivery until provision of sufficient security or the Contractor may at its option suspend or terminate the contract and the payment of all materials delivered and work commenced up to the date of such suspension or termination and all moneys payable hereunder shall immediately become due and payable.
(d) All costs and expenses incurred by the Contractor in enforcing these conditions of sale including all legal costs incurred in recovering any debts owed to the Contractor by the Customer, shall be payable by the Customer.
Claims – Any complaints made about the standard of workmanship or the carrying out of this work shall be made in writing to the Contractor at the address stated on the front page of this quote within 10 days following completion of the work.
Prices quoted are subject to variations occasioned by any increase in the cost of the materials to the Contractor subsequent to the date of quotation. The price payable by the Customer may be varied by such amounts as the Contractor shall certify to be reasonable having regard to the demonstratable variation in costs.
Prices are based on colour selections to mid range of R.V. values. Some colour selections may result in increased prices payable by the Customer following advice by the Contractor.
No responsibility is accepted for loss arising from delay or inability to deliver occasioned by strike, lock out, difficulty procuring suitable materials, goods or substances required in the manufacture of goods, mechanical failure, shortage of stocks, shortage of labour, lack of skilled labour, delay in transit, prohibition or restrictions, fire, flood, hostilities, civil commotion, terrorism or other cause whatsoever whether similar in nature or not to the foregoing. Any delay caused by the Customer will constitute a variation and be charged accordingly.
No liability or obligation is entered into, whether in regards to these Terms of Trade or any other way to any party not contracting with the Contractor.
Failure by the Contractor to insist upon strict performance of any term or condition herein shall not be deemed a waiver of any such subsequent breach of any term or condition. No provision herein to be deemed a waiver by the Contractor unless such a waiver be in writing signed by the Contractor’s authorised signatory.
The Contractor accepts no responsibility for any authorities or approvals that may be required from third parties in terms of the materials or services covered by this quotation or subsequent contract.
The Customer warrants that where it is proposed to affix or apply any material on any land or premises not owned by the Customer or to utilise any land or premises not owned by the Customer, all necessary consent from the appropriate authority or adjoining land owner has been obtained by the Customer.
Cancellation of this contract or parts thereof can only be effected upon terms which will compensate the Contractor against all expenses incurred and otherwise protect the Contractor against loss or profit and overhead on the execution of an order.
It is agreed that where any materials are repossessed in terms of this agreement the purchaser shall remain indebted to the Contractor for the purchase price or any part thereof that remains unpaid.
Prices quoted are based on the information available from the site survey. Where circumstances are encountered that are not foreseeable from the site survey requiring extra work, extra costs may be charged. If extra costs are charged they shall be paid for as set out in Clause 4.
The Contractor accepts no responsibility for the suitability of the structure substrate to which materials herein described are proposed to be applied.
If any dispute arises from the contracting parties it shall be referred to Arbitration in accordance with the Arbitration Act 1908 within two months.
Neither party shall vary the conditions of this contract without the written approval of both (signatories hereto) parties.
Implied Conditions and Special Terms – No conditions or warranties expressed or implied by law and no representations or statements are binding on the Contractor unless so specified on this quotation and these Terms of Trade and this quotation shall form the sole terms of the Contract. In the case of any conflict arising between the terms of the order and these terms and conditions, these terms and conditions shall prevail. No agent or representative of the Contractor is authorised to make any representations, statements, warranties, conditions or agreements not expressly set forth in the quotation and the Contractor is not in any way bound by any such unauthorised statements nor can any such statement be taken to form part of a contract with the Contractor collateral to the main contract.
The Resene Trade Blog
Information of interest for professional painters