Running the Business · Part 3
Taking payment: cards, ACH, checks, cash, financing partners, and getting every dollar into the right account
How a customer pays decides when the money arrives, what it costs to accept, and whether the state's honest-pricing law, the contract law, and the IRS have anything to say about it. This lesson sets up the payment methods a plumbing business should accept and the order to offer them, explains why a card surcharge added at the invoice is a legal problem in California while a cash discount is not, how a financing partner has to appear on the contract, what a $10,000 cash payment triggers with the IRS, and the one habit from Phase 1 that all of it depends on: every dollar, by every method, into the business account, the same day, tied to an invoice number.
What the full lesson covers
- Accept cards and ACH from day one; the customer who can pay on the spot pays on the spot, and a collections problem is usually a customer who was told "we'll send an invoice."
- Price the job with the cost of card acceptance inside it. Adding a card surcharge at the end that was not in the quoted price runs into Civil Code 1770(a)(29), which requires the offered price to include all mandatory fees; a discount for cash or check is the lawful way to reward cheaper payment.
- Payment method does not change the contract law: the deposit cap, no payment ahead of the work, and no payment before completion on a service call all apply to a card authorization the same as to a check.
- Financing through a partner must be stated on the contract under "Finance Charge," separately from the price; you are arranging a loan, not making one, and PACE programs have their own enrollment rules.
- Cash over $10,000 in one or related transactions is reported to the IRS on Form 8300 within 15 days; every cash payment, of any size, is deposited and recorded like any other.
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More lessons in Contracts and Getting Paid
- 1The home improvement contract (B&P 7159): every required element, the exact notices, and the three-day right to cancel
- 2The deposit cap: $1,000 or 10 percent, whichever is less, and progress payments that cannot exceed the work. CSLB's most common citation
- 3Service and repair contracts (B&P 7159.10): when the short form applies, what it must say, and how a service call falls out of it
- 4Subcontracts with GCs: the twelve clauses to read, what to strike, and what to negotiate
- 5Change orders: written, signed, before the work. Every time. Why verbal ones end in CSLB complaints
- 6Mechanics liens I: the 20-day preliminary notice. Miss it, lose your rights
- 7Mechanics liens II: recording deadlines, the 90-day foreclosure clock, the four statutory release forms, stop payment notices, and payment bonds on public work
- 8Collections: demand letter, lien, small claims, attorney. When each is worth it, and the one thing that makes all of them impossible
- 9Taking payment: cards, ACH, checks, cash, financing partners, and getting every dollar into the right accountYou are here
- 10Case: the job that went unpaid. Where the contractor lost lien rights and how to have kept them
- 11Case: the deposit that became a citation
- 12Case: the change order that was never written
- 13Template: the home improvement contract, with every B&P 7159 notice verbatim
- 14Template: the service and repair contract (B&P 7159.10), one page, with the notices verbatim
- 15Template: the change order, one page, signed before the work
- 16Template: the 20-day preliminary notice, with the proof-of-notice declaration
- 17Template: the four statutory lien waiver and release forms (Civil Code 8132 to 8138), verbatim
- 18Template: the demand letter, homeowner version and general contractor version
- 19Template: the subcontract review checklist. Twelve clauses, three boxes each