Cash on the Nail

Cabinetmakers offer strong arguments for getting paid before delivery — and detailed advice on communicating that policy. November 10, 2006

I have a job that is now ready for delivery. The job was delayed, because of customer indecision, and my workload. That means our relationship has fallen off - now to the problem. I am not doing the installation, but I have built and finished everything, and will deliver it to the home. Because of our falling out, I asked that the customer, along with their contractor, inspect and pay for the cabinets, and then I would deliver them. They say they will not pay until everything is delivered. Should I hold my ground? Should I have them inspect and sign-off on the cabinets, then deliver and expect payment? Or should I deliver and hope for the best?

Forum Responses
(Business and Management Forum)
From contributor K:
If everything is ready for delivery as you stated then load it up and take to the house - do not unload until the check is in hand. If they should decide then that they wish not to take the cabinetry for some reason explain that you will have to bill an additional charge for re-delivery as it takes time to load and unload. Sometimes it's easier to show them the product than get them to your shop for inspection.

From contributor T:
If you had CBD "Cash Before Delivery" in your contract then you would be justified in your approach - maybe next time? Anyway, the standard procedure would be to deliver (as planned) and if they refuse to pay then you have the right to remove the cabinets. The court will back you up in ruling that the customer can keep the goods or the money but can not have both.

From contributor H:
I would not deliver without payment or guarantee of payment. Once the stuff is on site it will be difficult to get it back. Once it’s installed you won't get it back. And due to the "falling out" it will be installed within hours by their contractor. Have them come to your shop and inspect the job. Have a third party present. You’re already a bad guy in their eyes. Be prepared for them to microscopic in their inspection of the stuff.

From contributor C:
Let me guess - there is no contract or written terms to guide both parties at this point. You are a small shop, perhaps one man, with all your efforts put towards getting work and getting more work and then paying the bills, with your business skills taking a distant 3rd or more behind all the other things you need to do. You may or may not have made any money (by realistic business standards) on this job - gut tells you no, but you aren't sure. And your relationship fell off due to a lack of communication between you and your customers, so that they cannot understand how you could be so late. Finally, your late arrival has delayed their job and cost them real time and money.

When their indecision very first showed up, you needed to explain how the timing works, and how such indecision will domino through the job - theirs and yours. It is often necessary to set goals for these types of people - species by this date, design by that date, color by such and such, etc. You must be the leader in these things - you do it for a living, and they are doing it one time, and are deep into unfamiliar territory.

Make the call, be the (belated) leader, patch it up and expect to be paid 5 days after delivery. Be ready to lien if need be. It is your fault, even if they were indecisive. If way back when, you had told them their indecision would delay, there would be no conflict today. Make sure to figure out how to avoid these things in the future. I'm sure you'll agree the fabrication, finish and delivery are difficult enough. Don't add to your workload by having to work so hard for your money.

From contributor L:
I agree with some of what Contributor C says. But do not leave the cabinets there without getting your money first. Tell them the final price (they should already know this through the contract) and you will need to be paid by a bank or certified check, this way they can't just give you a check and cancel it hour later.

You should also bring a witness with you, if you rely on their contractor as a witness the ball is in the client’s court, they pay the contractor so it is in the contractor’s best interest to agree with the client. I also don't believe that it is your fault entirely, and you cannot be a leader if the people will not follow. You can talk to them about rules and timing and what-not, but if they don't listen/understand it isn't going to help anyway. If you don't get paid and you place a lien on their home don't ever expect to get that money. You only get it when they move, and most people putting in a new kitchen are planning on staying a while.

From contributor S:
We are probably a larger shop than you, but for over 20 years our terms have called out for a 50% deposit, 40% pre-delivery. We usually stand our cabinets up if they are more involved, and send photos with the invoice by e-mail to the client with the explanation that as soon as we receive their approval and payment the cabinet(s) will be dismantled and finished and delivery will be approximately 2-3 weeks out.

At inception of every project we walk the client through our terms so their are no surprises and the terms also state that should the client not sign the contract, the payment will act as their agreement to the terms and conditions (with the usual 3 business days to change their minds). Hope this helps, and I would also suggest that you do not deliver without payment. If there are further problems have the payment put into an escrow account with payout at delivery.

From contributor B:
I would go ahead and deliver, but not into the house. Have the invoice in hand, without any discounts because you feel bad. Inspect everything, un-wrapping if need be. Get your paid in full check right there. Personal check is ok. I doubt you'll be able to get them to bother with a cashier's check. No partial payment - in full only. If they argue or complain or don’t want to pay, load the cabinets back into the truck and leave.

From contributor A:
Someone mentioned bank checks. Watch out for these. In Oklahoma you used to be able to walk into any bank, give them cash and get a "bank check" with only the banks name on it that looks like a cashiers check. I had a customer that took one for payment in a touchy deal thinking it was just like a cashiers check. The crooks actually were able to stop payment on the bank check, claiming a dispute. It eventually put my customer out of business.

Don't unload until paid. Be sure you have done a pre-lien notification on the job if required by your state. You can't lien a property in Oklahoma in some circumstances with out both a pre-lien notice before the start of any work and again before actually filing the lien.

From contributor M:
I would say trust your gut. If you have these feelings, it is probably for a good reason. Like Contributor C, I am going to assume that you do not have a good contract that spells out the terms. I am also going to assume that you did not designate a specific amount for delivery. Decide what a reasonable price for delivery is. Then tell them the price for the cabinets, and the price for delivery. Tell them that you can deliver the cabinets, or they can arrange their own delivery. But in either case, you will have payment for the cabinets before they leave the shop. They are more than welcome, and encouraged to inspect the cabinets before they leave the shop. But I wouldn't let the cabinets leave without payment.

As for liens, be careful. Let an attorney take care of this. In Texas there are many kinds of liens with different requirements. Some require both parties signatures, some only one. If you don't file correctly you can be liable for the legal fees to challenge the lien and have it removed.

From contributor D:
If you buy lumber COD it will require a payment before they unload. They will give you payment terms if you submit a credit application and are approved. Why should anyone get credit extended to them from a cabinet shop? Have they submitted an application? It has always been customary to get a deposit for custom-made goods. People can buy cabinets from many sources without having to do this, but they are limited in their choices, and usually are stuck with some kind of standard, big box store variety.

When a customer causes delays and then turns around and tries to blame it on me, it's a clear indication to proceed with caution. There is nothing unprofessional about requiring payment before delivery or upon delivery. That is the way most shops and cabinet companies do it, even with the good customers. Play it smart; this guy is going to badmouth you no matter what you do.