Mr. A’s business is going gangbusters. It feels like he’s working more hours now than when he held a forty hour a week job. Unfortunately we’ve run into one of the pitfalls of starting a new business.
One little hitch…
He’s working and working and working, but he’s not getting paid.
Yes, you read that right. He’s not getting paid. Worse yet, the check they paid us with bounced!
His most frequent client paid him for two months worth of work, with a suspicious looking check. It looked like one of those checks that come from your credit card company, but it looked like it was printed on copy paper, the paper was very thin. I called our bank to ask about it, and they mentioned using a black light to see the watermark. We own a black light and our son knew where it was at. We found that the back had invisible writing on it that said “Official Document”. Since it seemed like a real check, we went ahead and deposited it. The bank said they didn’t hold the check because my checking account is connected to a business checking account on which I am a co-signer. The teller thought there was plenty of money in that other account, so didn’t think to mention to me that the check should have been held. If they had told me that, everything would have been changed.
The check was returned unpaid within four days. The client claims the money has been removed from their account. That’s not good, since the money isn’t in our account!
Our bank resubmitted the check and put a hold on the $4000 until the 28th of April.
Mr. A’s truck’s transmission has been acting up and he finally took it in this morning, hoping it was something simple. It wasn’t. That repair is going to cost $950.00. Strangely enough, I feel comfortable with all this. Normally I’m freaking out.
It’s really hard running a business when you are afraid people aren’t going to pay you, or giving you hot checks. But I do know it is one of the risks you have to take in order to be an entrepreneur, especially in this economy.
One thing we’ve determined, we won’t be taking credit card checks again, at least not without making sure the bank puts a hold on the money so that we don’t end up without money for days and days.
Eventually it was discovered that the person who paid us made a payment to their credit card but in the meantime they wrote a check from that credit card check. You know how the credit card companies send those checks with the statement and even without the statement? It was one of those. The customer wrote one of those checks and sent to us, and then made a payment. Well, it turned out that we took our check to the bank too soon and that is why it ended up bouncing. I had to go into the bank and talk to the manager to figure that all out.
Well, I guess these are the pitfalls of starting a new business. It’s definitely a learning curve.