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Late payments – what are tradespeople doing about them?

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Here are three stories from real tradespeople on the live show Talking Trade about how they manage late payments.

On a recent episode of Talking Trade, host Andy Willcox talked to a panel of tradespeople, electrician James and landscaper Justin, about the topic of late payments for work and what can be done about clients and customers paying late.

Our social live show, Talking Trade, has covered a range of topics that really matter to the construction industry, from depression to what it’s like to be on the tools with your family. We’ve even covered late payments before! Because of the ongoing nature and the severity of the issue, we think that there’s no harm in bringing it up again.

Here are three stories from real tradespeople on the live show Talking Trade about how they manage late payments.

Disclaimer: These stories are the personal experiences of our panellists; they are not guaranteed methods of combatting late payments.

When to call a debt collector – electrician James

“We had a commercial job to transform offices into a coffee shop… By the end of the job, the client was happy and the builder was happy. I gave them my bill and they said they would pay me on Friday.

Come Friday – no payment. I rang the builder up and he told me it would be Monday, now. Monday came – no payment. That carried on for a while until COVID hit. He began to use that as a bit of an excuse. When I rang him up to tell him we had to get paid, he said, “COVID’s come, I’ve got to look after my family, and look after the business.” I said, “Well, so do I!” You can’t just hold up payments.

Then, he said that the client hadn’t paid him. So, I gave him a bit of leniency; I felt sorry for him. I rang the client and the client told me they paid him £60K a few weeks ago. We were still owed £20K.

I’ve got a mate – a lad called Gary: a proper tough debt collector. I just left it to him and stayed out of it. We got a lot of texts from him saying he was going to liquidate the company if we didn’t get this debt collector off his back. He ended up paying us, in the end, plus a few grand more. It went on for months.”

How to deal with deposits – Landscaper Justin

“If you’re an electrician or a plumber, and you’re going in and doing a three-day job, or a seven-day job, maybe you could charge 50% for your deposit. But when you’re going in to do a higher-end landscaping job that’s £80,000, the client is going to be reluctant to pay such a high percentage.

For me, it’s a lot about the feel. They’re gauging me on whether they trust me to do their project, but I’m also gauging them on whether I want to work for them, whether they’re going to pay me, whether I’m going to be happy, and whether the relationship is going to work both ways.

The size of the project all counts. If you’re doing a big project, you’re leaving yourself open to going bust, basically. That’s your livelihood, your mortgage, your children’s food, your holiday, it’s everything.”

When contractors pay late – Electrician Andy

“I don’t think anybody ever worries about the subcontractors, do they? Even though we’re the backbone of the whole country and we keep it going. There does need to be something done.”

In each episode of Talking Trade, we welcome comments, suggestions, and stories from the members of the On The Tools community that are watching live across Facebook, YouTube, and LinkedIn. In response to a comment by landscaper Justin about contractors failing to pay their subcontractors on time, LinkedIn user Frasier Eadie said:

“You’re absolutely correct. The main contractors use subcontractors as free banks to fund their projects. The contracting industry needs some proper governance in the UK.”

 

Do you have any stories about this topic? Get in touch with us and let us know.
Thank you to SumUp for sponsoring this episode of Talking Trade.
Find more episodes of Talking Trade here.
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