Forum Discussion
Lantley
Dec 11, 2013Nomad
westend wrote:Lantley wrote:You've got it right, a small business has the most problem with extended payment schedules. Not only do you have to wait to get paid for the labor but if you have a materials-heavy project, the vendors don't want to wait on payment.
60 days net maybe the new world order but it's not always lucrative if you are due to be paid.
How many of are paid 60 days net by their employer? For a small operator 60 days is a long time.
In the end it is easy to see why many shy away from warrantee work.
Straight payment is just easier and more profitable. Why jump through hoops if you don't have to?
Let someone else (like the selling dealer) play the warranty game.
I've been at this long enough to just add in appropriate costs when I deal with these types of financial arrangements.
I agree to padding cost when you can, however with a warranty claims padding cost is not as easy as the manufacturer sets the rates and must approve the claim.
It's easier to simply avoid the warranty work and eliminate the payment headache.
In too many cases the the service provider finds themselves on the short end of the stick.
Furthermore unless the service provider can pay their suppliers and themselves in 60 days they ultimately end up providing 0% interest financing for 60 days in addition to doing the work.
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