Steve Mabe
Stephen L. Mabe Building
Winston Salem, N.C.
Big50 1990

Some potential customers need to hear about the payment schedule information at our initial meeting. However, we usually discuss the payment schedule after we have gone over the base bid and described what the next steps or processes with our firm will be. This is also an important time to reinforce our procedures with respect to our draws or the payment schedule. We use clear and concise terminology such as “foundation in place,” “under roof,” and “drywall is hung and finished/ready for paint” to set unambiguous benchmarks for our draws. Occasionally we are under a process called “percentage of completion” draws. Personally, we have found this process to be a bit unfavorable. On one job in particular, we had more than $70,000 in actual cash outlays with respect to window, cabinetry, and trade deposits while the lender had just $32,000 as the draw for its percentage of completion. This experience made us realize that we not only have to educate our clients, but also their lenders. We now have a joint meeting with all parties.

R.G. Iossi
United Services by R.G. Iossi
Davenport, Iowa
Big50 1991

Whether it's a remodel project or an insurance restoration project (which is primarily what we do), we discuss our payment schedule very early in the process. If it is a remodel project, we review what the client wishes to have done and their financing. We discuss the payment plan so they know our terms and are not surprised later.

On insurance claims, we have to explain a number of issues to the insured because they are not familiar with the process. This also includes the payment terms because, frequently, they feel it is the insurance company's responsibility to pay us. We make it very clear to the insured that we are working for them, on their behalf, and that we will be accountable to them, not to the insurance carrier. The carrier is simply there to reimburse them for their loss, less their deductible.

Alan Asarnow
Ulrich Inc.
Ridgewood, N.J.
Big50 1990

Most often the payment schedule, which is printed on the contract, is presented at the time of the contract closing. Sometimes, however, clients want to know this schedule in advance of the contract in order to be more prepared for their financial obligations. It is a rare occurrence that clients take issue with our payment schedule, because we tie the payments to very visible project milestones. This ensures that the client knows when specific segments have been completed and is then prepared to pay.

Peter Jacobson
Lake Country Builders
Excelsior, Minn.
Big50 2000

At my first appointment, I give clients an overview of the process. That is when I tell them verbally about the payment schedule. After that, if they hire us, I mention it again at the final sales/proposal meeting. Also, the information is on an addendum to the contract. We typically receive 10% down on the sales price. Then we bill every month for materials and labor based on the work accomplished. Clients are paying for what they see.

John Lafian
Crown Construction
Dryden, N.Y.
Big50 1997

I communicate the payment schedule to my clients very clearly in the contract document and again a few days before the payment is due. Our foreman presents them with the invoices. I'll also explain the schedule anytime during the sales process if the client asks me about it. The clearer you are, the better, and the less chance there is for misunderstanding. The important thing is to leave as little at final payment as possible.

Bob Earl
Casa Linda Remodeling
San Antonio, Texas
Big50 1995

We primarily talk about this at our first in-home visit. Part of that discussion is about the whole process and each party's responsibilities in that process. One of the owner's responsibilities is prompt payment. We also have a draw schedule on the front of the proposal so that the owners know that we have nothing to hide. Our draw schedule mirrors the draw schedule of most local lending institutions.