Sub contracting to companies

[ians]

Sub contracting to companies

Should i feel like a monster expecting him to pay me. I just dont know what to believe anymore. Should i not be paid, considering i have a R26000 payment confirmation from his customer for the electrical work, which was paid to him last year already.

[SilverNodashi]

Unfortunately, if you use a small business you might run into problems like this. The owner often doesn't have funding to grow and use the money that comes in to survive. Sometimes they pull through quite well and everyone is happy. 5 years later his company has grown, he has some staff on his payroll and can take a financial knock in order to deliver the goods / services. Mate of my wife who owns a printing company has to take a R3mil knock, for 3 months for a large client. Some years ago they couldn't do it, now they can.

On the flipside, you sometimes deal with someone who just can't seem to get out of the starting blocks. Life happens and they often find themselves in a spot where the cash just doesn't flow and they use project money for other debt. This shouldn't be the client's problem, I agree. But how far are we willing to go to "help" make, or brake these small businesses?

Just my 2c, perhaps he is honestly in a tight situation and just trying to get through each day. You are unfortunately on the other end of it and feeling the losses.

[ians]

What i am trying to understand is where has all the money gone. He was paid in full by the previous customer for work "completed" but was asked to leave site. I am told he was paid around R 400 000 for work for the project which i sub contracted to him, which included R 26000 for the electrical work.

[ians]

I would very concerned right now if he was my building contractor, how is he going to complete his contract if he is going to use the money for doctors/hospital bills and other payments outstanding from last year?

[SilverNodashi]

What i am trying to understand is where has all the money gone. He was paid in full by the previous customer for work "completed" but was asked to leave site. I am told he was paid around R 400 000 for work for the project which i sub contracted to him, which included R 26000 for the electrical work.

how much of that went into equipment and tools?

We did a project in November worth R2mil, got 70% upfront and had to borrow another R200,000 to finish the job + pay wages. The remainder of the payment is still outstanding due to issues on the client's side.

Let's say he takes 10% cut, so that's R40,000 or R42,600. How much was spend on bad decisions, extra labor, extra tools, etc. Have you sat down and had a hart to hart chat with him?

Or is it easier to to name & shame, and sue him?

[ians]

I sat with the customer and this person on the 24 December 2015. They both agreed that i should be paid. It is the 14 March 2016. What do you suggest we have a heart to heart about ? The November 2015 invoice has still not been paid.

[ians]

how much of that went into equipment and tools?

We did a project in November worth R2mil, got 70% upfront and had to borrow another R200,000 to finish the job + pay wages. The remainder of the payment is still outstanding due to issues on the client's side.

Let's say he takes 10% cut, so that's R40,000 or R42,600. How much was spend on bad decisions, extra labor, extra tools, etc. Have you sat down and had a hart to hart chat with him?

Or is it easier to to name & shame, and sue him?

Just trying to understand your point here, should i carry the main contractor for his mistakes and issues with his customer?

I made a point of meeting both of them in December to make sure there were no problems on my side. For example everything works, is straight and done within the time frame allocated. Another example I arrived on site at 8 am on Monday morning as i indicated i would. All my work is done using dustless chasing equipment, we clean up all our mess every single day. We cover counter tops with blankets and use roof sheeting on floors where we work.

Please feel free to point out anything i might have done wrong so that i can rectify it and once again request my payment which is months overdue.

[ians]

By the way, i even have dust extraction on my hilti drills just in case we drill into a ceiling or wall.

[sakkie]

how much of that went into equipment and tools?

We did a project in November worth R2mil, got 70% upfront and had to borrow another R200,000 to finish the job + pay wages. The remainder of the payment is still outstanding due to issues on the client's side.

Let's say he takes 10% cut, so that's R40,000 or R42,600. How much was spend on bad decisions, extra labor, extra tools, etc. Have you sat down and had a hart to hart chat with him?

Or is it easier to to name & shame, and sue him?

Why have a hart to hart with him? He requested a job to be done, it was done and now he can't/doesn't want to pay.

I have also been in tough positions and find that if you are honest and upfront and at least make an effort to pay, people are much more understanding.

So NAME AND SHAME him

[Justloadit]

I have a supplier in this situation as well, and is never able to deliver the job, unless I again give a deposit for the next job so that I can get my previous job out of him.
2 points here, 1, he is f..king up my business, as I run a tight ship with respect to finance, purchasing of equipment, and delivering on time to get paid 30 days later to pay my creditors, with the delays, I have delivered late, so I now have a financial problem to pay my creditors.
2nd point, I have tried for the last year to help him get over this starting hurdle, but he just can not understand how to get out of it. Seems to continually be in the dwang. I think it has to to do with money management. I think that he is living beyond his means, as he may think that he has a facade to show with in his community.

I am considering at the moment to kiss about R50K as a loss and get rid of this continuous nonsense, which is about 5% of my business, but with out that item, I can not deliver, and use another supplier who can deliver as per my request, and does not request a deposit, and gives me 30 days credit.

Some people just can not manage money.
Last December he came to borrow R6K in prepayment for a future order, so that he could get his Dutchhund operated because these dogs have a back problem. WTF, he then did not have money to buy the materials in January to make the order, so I had to give more. Don't need this in my life.

This continuous supply of upfront money affects the limited cash I have to trade while waiting for my payments from my customer.

[SilverNodashi]

Just trying to understand your point here, should i carry the main contractor for his mistakes and issues with his customer?

.

From this point of view, none. He obviously pocketed the R426,000, so let him burn.