Payment Issues

Discussion in 'Professional Catering' started by dlyles, Sep 17, 2016.

  1. dlyles

    dlyles

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    So I've officially been in business a little over a year.  One of my first signed contracts has their wedding coming up next weekend.  Their final payment was due this past Saturday, however they've only paid half of the final payment.  We're a small operation.  The final payment is needed to get their food and china.  We sent a "hey where's the rest of the money" email this morning.  Should we establish a deadline, or what?  Any advice on how to handle this, as I'm sure it will happen again, would be great.

    Thanks.
     
  2. foodpump

    foodpump

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    You're too late.

    Most catering co.s work like this:

    10-25% upon booking
    25-50% 5-7 days prior to the date
    25-40% on the day of the event BEFORE food is served

    I guess by now you can figure out why......
     
  3. dlyles

    dlyles

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    I think you misunderstood my dilema.  I've already been paid 25% on booking.50% 60 days prior to the event and the final 25% was due a week before the event.  In other words, we're usually paid in full before the day of the event.  So what we don't have is the final 25%, but the event isn't until next week.
     
  4. panini

    panini

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    @dlyles  ,

    Shouldn't be a problem. If the total payment was due last Saturday, make contact  again ASAP and inform them that you must stick to your contract.

    Tell them you'll agree not to charge for late payment if funds are received today before 5pm.  Also inform them that due to the past due funding you will only be able to accept cash.

    I would also tell them you have communication waiting to go registered mail to inform them that a late payment would constitute a release of all liabilities on your part. That will be mailed at 6 pm.

      This way, should your function not happen, you can deduct any and all monies spent and they can wait on receiving the difference just like your doing now.

      Your experiencing what I call the worst part of owning any business, " Chasing Money" hate it !
     
  5. dlyles

    dlyles

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    @panini

    Thanks for the advice.  I sent an email this morning and will call them this evening . I didn't think about charging a late fee, but definitely will set a day (say Tuesday) for a late fee charge.  I'm ok with cc payment, but that was useful going forward as far as cash payments.  Yes, I hate chasing the money.  Their good people and I hate these disputes, but we're in business to make money, not friends.  Again, thanks for the great advice.
     
  6. chefbillyb

    chefbillyb

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    I would bet someone told them they're stupid for paying the whole amount before the function. I know I would't pay the full amount. If I'm not happy with the caterer I want the ball in my court. Don't send e-mail find out what the real problem is about. Call them!
     
  7. dlyles

    dlyles

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    Thanks for the input.  Understandable about not paying full in advance.  However that's our standard policy and they did sign a contract with stated due dates.  Already sent an email, but will follow up with a call.  I would like to give them the opp. to respond.
     
  8. panini

    panini

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    My response was taking for granted they were not paying. My thought is that thy just refused to respond.

    In 20 yrs. had only had one bounced check and that was a mistake. We always give the benefit of the doubt unless there is no gray area. Wedding are crazy. People drop the ball all the time.

      Also not sure where the confidence factor comes in with CC.  If I had something questionable going on, I think I'd take a check over CC. At least I can get immediate funds that can't be retracted.
     
  9. foodpump

    foodpump

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    Hmmm...  How do I explain it?

    By the time the caterer shows up 3 hrs prior to the event, the deal is done.  Product bought and processed, large chunk of labour invested already, more labour involved in packing and site inspection, waiters and bartenders hired and sitting in the van ready to unload. Rentals contracted and paid for.   It's done before the event has even started.  You aren't buying a flatscreen TV or a fridge here that can be taken back by the re-po man should things go south.

    Does that explain it?
     
    cronker and millionsknives like this.
  10. chefbillyb

    chefbillyb

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    OMG! How could I be so dam stupid! To think all this work is done, waiters waiting, food ready, tables rented. Then the buffet line slides down the hill into the water. No one is able to eat. Case closed my a-s.......I would never pay a caterer 100% of the money before they delivered what was contracted. I have catered for over 30 years and have never had 100% of the money in my pocket before the event. How do you explain that ????? 
     
  11. foodpump

    foodpump

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    Well, I only did it for 10. 'Last weddong we did, m.o.b. (mother of bide) kept lowballing us. Didn't want appies, fine. Didn't want a bar, fine. Sign here please. Our policy was 25 down, then 50 14 days prior, and the last 25 BEFORE the event starts.

    Dinner was at 6 at 2 m. o. b. gets the security guard to call us, telling us we`re an hour late. Get there at 4 and mob has a "welcoming party" for us. She`s screaming about her appies, her guests are hungry, and cousin Joe over here is a lawyer, we want compensation. NOW! I look at cuzzin Joe, and ask him if he`s looked at the catering contract. He dissapears. I tell f.o.b. to look at the contract, write us a cheque for the amount owing, or the vans turn around and you`re on your own. Screaming ensues between fob and mob, mob dissapears, fob cuts us a cheque, the waiters start unloading Quietest event I ever did.

    We stopped doing weddings after that......
     
  12. cheflayne

    cheflayne

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    Different people have different methods and policies for running their businesses. As to the client in the OP, they agreed to the terms as set forth without anybody holding a gun to the heads.

    I was primarily a restaurateur, who offered catering services as well. On a nightly basis, I dealt with a dining room full of clients who ate dinner before paying, so I pretty much did the same when it came to catering. I got earnest money up front, but the final bill was due upon completion. I was even known to wait a few days after completion to approach clients about settling up because that way I didn't interrupt or intrude on the festivities.

    I am either a too trusting fool or a thoughtful savvy businessman, depending upon who you talk to. I just know that I never got stiffed or had a problem. I also know that my waiting a few days policy blew people away and it created tons of good will word of mouth advertising leading to increased revenues. I am either a too trusting fool or a thoughtful savvy businessman, depending upon who you talk to.

    If I fly to Hawaii, I have to pay 100% up front. Go figure!

    Different people have different methods and policies for running their businesses. Nobody holds a gun to my head and I decide what I deem acceptable and what businesses I wish to patronize and which ones I don't wish to patronize. Darwinism alive and well in the capitalist society.
     
  13. panini

    panini

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    For the last 20 yrs. I've sat on the board of a local foundation supporting an orphan disease. I have probably booked, start to finish, 120+ catered functions. Whether it be a local venue, hotel, etc. funds and count were required before the function. We always had a card on file for higher count, bar, etc.

    This could be just our area.

    I always viewed this as a sort of security policy for both sides.

    just sayin 
     
  14. jimyra

    jimyra

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    You received 75% by six weeks prior  to the event if I read your posts correctly. I would suggest that in the future you set aside the funds for that event to be spent for that event.  Then take your profit from that final payment.  That way you will have the  operating funds you need.
     
  15. chefbillyb

    chefbillyb

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    I hired a brick layer last month 50% down the rest when the job is done. Do all the caterer's here pay for their haircut in advance. If I am contracting a service I would never give 100% payment until the service was completed. When I worked with my clients I shook their hand in the beginning and at the end of the function. I met with them at the end of the function so I could find out if it met their satisfaction. I didn't do many weddings because they are a PITA. When I booked a party I told my client I would take care of everything that was contracted. I don't want to relive this everyday and have changes. When I leave them, all logistics are figured out and the menu is complete. When the client is able to constantly get involved in the logistics there is a greater chance of the function being screwed up. I never let the client get so involved as to make me their scapegoat. 

    Chefflayne: If I fly to Hawaii, I have to pay 100% up front. Go figure!......The only reason you have to buy the ticket upfront is because if the service isn't complete you won't be around for final payment.
     
  16. dlyles

    dlyles

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    Thank you for all the replies. They did pay the balance without further follow up. They just needed to use two cards and make two payments. U read all the opinions on payment in advance. We all have different methods but the bottom line is they signed the contract. Even if they disagreed about paying up front they signed to that affect. Either way problem resolved and I will use these comments going forward.
     
  17. cheflayne

    cheflayne

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    /img/vbsmilies/smilies/lol.gif    /img/vbsmilies/smilies/crazy.gif    /img/vbsmilies/smilies/thumb.gif Absolutely hilarious! LOL! Being the eternal optimist that I am, I never considered that simple business fact. Many times the obvious plumb evades me /img/vbsmilies/smilies/redface.gif   Thanks for the chuckle at myself to start my day.
     
    Last edited: Sep 18, 2016
  18. cheflayne

    cheflayne

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    This basically is the core truth. Everything else is pretty much moot after that. Glad it worked out for you. Hopefully no feathers were ruffled in the process. Chasing money is never pleasant but it sure can be educational.
     
    dlyles likes this.
  19. panini

    panini

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    I just want to explain my statement on there is risk and security on both sides. Say I'm having a fund raising event. I have 300 guests coming. I'm projecting 250.k in donations. I have paid 50% up front.

    Just before the event start: The food, servers, valet, etc. are a no-show.

    So now guests are waiting in cars with no valet and chose to bag the event because of the chaos.

    If I have paid 100% for services rendered, I now have an actionable claim to include collateral losses.

    If I have 50% down, " Judge Judy would say, you get your 50% back and nothing for the rest because you haven't paid for it. Guess who paying back 10,000.00 sponsored tables?

     Who takes the greater loss, as someone mentioned, if the food slides into the river.
     
    Last edited: Sep 19, 2016
  20. cronker

    cronker

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    We always get full payment up front, and especially so for wedding receptions.
    It's highly likely that the client will tell you that they don't have their CC with them on the day (they're in their wedding dress etc) and they will settle up in a couple of days.
    Except that then you can't reach them because they're off on their honeymoon.
    A month later and you finally get hold of them and then the fun starts.
    "Oh, but my third cousin had the beef but really wanted the chicken, and you served the wedding cake in three inch slices when we wanted them in four. And it was a hot day and you failed to call God and get him to fix it. And we were both so drunk that we didn't have sex that night, so I'm not paying."
     
    meezenplaz likes this.