Unpaid services

[hemi444]

I looked through the forum and could not find this subject type.
Not knowing how some states work but I was wondering how do agencies recover funds from services that have been rendered to clients, when they refuse to pay up? I know here it is a long process and alot of litigation to get money owed to the agency that provided service to a client. I know of one case that a client owed an agency over 50,000 dollars but it took over a year and a half to get the money that was owed.

[N. A. Corbier]

I was taught that most large companies will not pay until threatened with collection. Ie: Your terms are NET 30, expect to be paid NET 90. They do this to keep the money in the bank, collecting interest, as long as possible.

Its the ones that exceed your deadline in a demand letter that you have to worry about. Most companies will pay, abiet slowly. A good thing to do is see if they're Dunn and Bradstreet listed. If they are, you can write a letter to D&B outlining the past due account. Ie: Reporting to D&B. This screws their DUNS number up, as D&B maintains a seperate business credit rating.

Several companies offer turn-key collection services. Usually, you just turn it over to them. The important thing, of course, is to stop providing services. Period. If you keep sending employees out there, the folks aren't going to care. If you warn them, "We will suspend your account and refuse to provide services, as outlined in the contract, until you pay us," they may come around. There's also forfeting the contract by material noncompliance (failure to pay), which adds additional fees.

[1stWatch]

This is a big problem in my state as well. Interestingly enough, a bill was proposed to the legislature that would define nonpayment of service to a security services contractor as "theft of service", providing a criminal penalty and allowing for treble damages to be collected civilly. This measure was opposed by several groups, however, and was struck down. It would have been interesting to have seen that one become law.

[Warren]

Most large companies are 90 day payout, regardless of your terms.

I know with my company, I have a couple customers who refuse to pay once a month. (These are mobile customers only, so the cost is minimal). I have one that pays every 6 months....I don't like it, but he is consistant, so why not.

I would NOT tolererate this if it was guard service...90 days max!

And a 50k bill?? Unless that is 3 months of work, the company is stupid for letting it go that long!

[N. A. Corbier]

Most large companies are 90 day payout, regardless of your terms.

I know with my company, I have a couple customers who refuse to pay once a month. (These are mobile customers only, so the cost is minimal). I have one that pays every 6 months....I don't like it, but he is consistant, so why not.

I would NOT tolererate this if it was guard service...90 days max!

And a 50k bill?? Unless that is 3 months of work, the company is stupid for letting it go that long!

You gotta have deep pockets to let a bill go past 50k. That's several months.

One of the best things I've ever heard from an owner:
Do not have more than 25% total sales in one client. IF you do, that client is a slow pay or terminates, where's your company NOW?

My former employer survived a 35-55% loss in total sales from an underbid from the Sheriff's Office. We didn't think he would. But, thankfully, he proved the troops wrong, and survived.

[hemi444]

This is one of the natioanl wbc that does not pay attention to there clients debts. I know they were losing money because they only billed the client when a s/o made key hits and thats how they based there billing for some clients. Stupid when you only have 17 key stations and charge the 1.50 a hit....

[Lawson]

Is clients not paying actually a big problem in this industry? I always thought it was kinda cut and dry... officers do the work, client pays the company. Im sure if a clean enough contract is cut out it would be a criminal act not to pay.

[N. A. Corbier]

Nothing is ever cut and dry in business to business transactions. Its why everyone wants purchase orders and terms. Oh, I'm NET 10? Ok, you'll threaten to sue me at NET 30, so I have NET 25 to pay.

Why put up with it? Because a slow pay is still a pay, and a client is still a client.

Key Clocks are evil. Many huge companies pay by the hit, because the client will not pay for services unless there is verifable evidence that the service is being provided. That's what the key clocks are for, to determine that the guard is not asleep or off post. This is visible deterrance at its best, the guard has no time to do anything BUT hit those keys, nor does the client expect anything more. They just get to inform their insurance carrier "We have a guard, where's the discount?"

Many security experts still state that you should have key clocks for your contract guard force, and pay only based on the key clock reports. If there is any issue, refuse to pay till that issue is solved. Ie: Don't like the guard? Withhold payment till they prove he's been fired. Don't like that the speed the keys are hit? Withhold payment till its in writing that they do it 2 times an hour, not once. Someone missed a key a week ago? Pay all but that hour, as a tour was not completed.

[Bill Warnock]

The theme seems to be whatever it takes to minimally meet the insurance carrier's requirements. With the spate of workplace violence incidents, expect that to change. Many law enforcement agencies expect more from the private sector security agencies to adopt a more "proactive" role as they themselves state they have a "reactive" role.
The most for the least!
Enjoy the day,
Bill

[ACP01]

A long time ago The guy that owned the place I worked (non-security stuff) was both a lawyer and had an accounting degree.
He NEVER paid his bills until the last moment but would go after someone just a couple weeks late.
He said he made more money faster that way due to interest being paid from the bank.
At least he always made payroll on time.

[N. A. Corbier]

A long time ago The guy that owned the place I worked (non-security stuff) was both a lawyer and had an accounting degree.
He NEVER paid his bills until the last moment but would go after someone just a couple weeks late.
He said he made more money faster that way due to interest being paid from the bank.
At least he always made payroll on time.

That's right. Every day you delay payment, that's a day of interest earned. I knew of a company that didn't pay their payroll until three days late. To about 1/4 the employees, randomly generated. Why? See above.

[Mr. Security]

This is a big problem in my state as well. Interestingly enough, a bill was proposed to the legislature that would define nonpayment of service to a security services contractor as "theft of service", providing a criminal penalty and allowing for treble damages to be collected civilly. This measure was opposed by several groups, however, and was struck down. It would have been interesting to have seen that one become law.

Regarding the way the bill was written, do you know if the prosecution would have to prove intent? If so, that could complicate things.