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Old 8th August 2010, 04:36 PM   #1

Join Date: Aug 2010
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Default Customer Will Not Pay For Services Rendered

We own a Small Engine Repair shop in Florida

One customer owes us over $700.00 for rebuilding and parts for a piece of equipment. He said he wanted it fixed no matter what or cost. (All of this at our cost)
When we told him what his bill was, he said he was not going to pay the bill and to take it apart and give it back to him the way he gave it to us. We told him that our labor is included in the bill. He said he was not paying it.

Now, we still have the equipment and the bill is unpaid. We sent out the first, Certified/Return Receipt letter requesting payment in full. Haven't heard a thing.

Without going to small claims court, what are our options? How long do we hold on to the equipment before selling it to get our money?
Your advice would be greatly appreciated as we are honest as you get when it comes to running our business. We want to keep our customers. Thank you.

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Old 27th August 2010, 03:34 PM   #2

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Default Check your local laws.

You should be able to send the customer a notice that if he does not pay you in X days (check your local regs) you are going to sell it as abandoned property.

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Old 31st August 2010, 12:35 AM   #3
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Location: Michigan
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Mainly ask him what he think is fair & reasonable.

1. Give him XX number of days to pay or send bill to collections. Also Submit documentation giving up ownership if bill is not paid in XX of days, that the item will be resold to regain any losses that occured.

2. If he wants it back the way he gave it to you & dosnt want your additions, tellem you will be more than happy to deduct the cost of parts but the FIRST bill of labor will occur as well as a SECOND bill of labor to undo what was done.

So he can pay for the Work or simply just the labor. Check with local attroneys, you should be able to sell the item at COST of labor & parts. Or check to see if a collections company will buy the debt for a %.

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Old 31st August 2010, 11:01 PM   #4
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Basically, I agree with the others above. You don't have a lot of choice.

Now, moving forward, start this TOMORROW MORNING!

You MUST impose a 'Quote' process where you can provide a quote before you do any work. Now, I know that's easier said than done. But hold on ... this will work. And if you want to succeed, it MUST work in your business.

You start with a Quote and tell people that there is a CHARGE for that quote. That means, you check it out... you run all the numbers and tell me that it's going to be $500 and I say forget it... you STILL get paid for the quote.

Now if I bring it back to you (in XX days... usually 30 days) you will DEDUCT the price of the quote from the job. That's because you would have had to come up with the quote to get the job, right? So that's only fair.

I operated an Auto service business. We did a diagnosis and quote. The customer signed the work order... and was asked to pay for the quote. It was 5:00pm and he said he was coming back in the morning to get the job done. We still insisted that he pay for the quote. When he asked why, it was simple. People DIE! We did the quote... we get paid.

Don't mean to be a pushy guy... but you MUST have a process that you approach all your jobs with. That way, when people (sorry, jerks like this guy) don't want to pay... you've got it covered.

Hope this helps! Remember.. you gotta start this TOMORROW MORNING! Got it?

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Old 2nd September 2010, 11:52 PM   #5

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Posts: 79


I like Be-the-Best's suggestions!

Here is another collection method that can be time consuming but very effective. Take the creditor to collection to a collection agency who is also an attorney. Then have the attorney do the following:

1. Take creditor to court
2. Get judgment
3. Get execution order that is obtained after judgment
4. Find out the creditors license plate number on his/her car
5. Have county sherrif possess the vehicle to sell at auction.

As soon as the sherrif shows up and demands the keys to their car they pay including all costs of collection. The process can take 3 to 6 months but it works. I am not an attorney but I have seen this done more than once.

Michael Barbarita - Next Step CFO - CFO Services
Starting a Business
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Old 6th October 2010, 02:55 AM   #6
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Location: north carolina
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I wouldn't even waste time with collections or small claims. Send a notice, check local laws and see when it would be considered abandoned and at that time sell it.

Then implement what bethebest suggested as practices.

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