How to Collect What you Bill!

You’re familiar with the phrase “caveat emptor” (buyer beware), but have you ever heard the warning “seller beware”? Back during our formative years at Peachtree Movers, we did business on a handshake–that is, until we moved a law firm that nearly drove us into bankruptcy. As a result of the experience, I’m sometimes accused of being cynical–and proud of it!

I remember how excited I was when we were awarded the job of moving a mid-sized law firm into a brand-new building in downtown Atlanta. It was a 20-truckload “shuttle” move–going from one high-rise building to another–commencing at 6 p.m. on a Friday, continuing all day Saturday, and finishing around 5 p.m. on Sunday. Since it was the only job booked that weekend, we had plenty of equipment and an excellent crew.

My contact was a professional, knowledgeable young man with prior law-firm moving experience. He and I had a great working relationship and looked forward to working together. It wasn’t until the day of the move I found out that what should have been an uneventful weekend would ultimately become one of the biggest challenges in my short moving career.

At 7:30 p.m. on Friday, my supervisor called from the destination to tell me loaded trucks were backing up onto the street because they weren’t able to get into the new building. An hour later, I discovered why: The new building residents had failed to secure a certificate of occupancy (CO). Since none of my trucks or equipment could recycle in a timely manner, I had 11 men standing around at the origin doing nothing until 9 p.m. when the fire marshal finally granted a temporary CO. We stopped working at 11:30 p.m. after moving only three truckloads into the new building.

Saturday morning presented even greater challenges. When we arrived at the destination, I was shocked to find installers laying carpet in the main corridors–our only access into the offices. As a result, not only did our trucks and equipment back up, but the gridlock caused us to handle furniture two to three times before being able to place it. It wasn’t until 11:30 p.m. on Sunday that we finally finished the move. As we were leaving the building, the carpet installers thanked us for being so cooperative and accommodating in working around them the entire weekend.

The following Tuesday, I presented an invoice to my contact and explained why the final bill came to $22,000 instead of $19,000 as estimated. He told me we did a great job and he would pass the bill on to the “powers that be.” Six weeks later a letter arrived from the senior partner. I choked and had trouble breathing as I read it. He accused our supervisors of being unprofessional, and blamed them for the move taking longer than it should have. He agreed to pay us the estimated cost of $19,000 less any damage claims, but not a penny more. I tried to meet with him to present our case, but he refused. It wasn’t until I sought legal help in collecting my money that I learned the importance of a moving contract.

Without a signed contract spelling out terms and conditions, I discovered I could not sue for interest, legal fees or court costs. Without a signed contract, my customer had no incentive to pay me. And that’s what happened. During the five years it took to finally collect the full amount, we didn’t have the use of the money, which really hurt our cash flow.

In the aftermath, I created a contract for every job called an “order for service,” which included the following stipulations:

  • The final bill is based upon the actual time and material–not the estimate.
  • Net is due upon receipt and the customer is liable for collection and legal expenses, as well as interest in obtaining full payment.
  • All invoices must be paid in full before claims are processed.
  • We are not responsible for unforeseen contingencies (such as if the building fails to get its CO or interference from carpet installers).

We started requiring customers to sign a contract prior to work commencing. Refusing to sign meant they had no intentions of paying, so I considered it a favor and, of course, we did not move them. From the time we implemented the contract in 1984 until the sale of my company in 2000, only six invoices went uncollected in full, and none of the amounts exceeded $3,000.

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By | 2017-10-19T19:52:12+00:00 October 19th, 2017|Uncategorized|