Good quality control is important, but contracts and business practices should keep punch lists within reasonable limits. October 26, 2012
Question Lately I have noticed a trend of customers submitting punch-lists that are totally unreasonable. We do residential kitchens and baths. We do top notch work and we stand behind everything we do. In past years I have found that I am the harshest critic when it comes to our work. When I notice something substandard, I fix it. The customer does not have to tell me a thing.
Here lately it seems customers are becoming extremely difficult to work with. They nit-pick some of the most ridiculous things I have ever seen. They find things to complain about that are by far accepted by industry standards. Even worse, they prolong getting the lists to us, and once we do everything on the list, they come up with more items. It’s beginning to seem they are doing this intentionally.
I have asked homeowners on several occasions to meet with my installers one-two hours before the end of the last install day so they can be there to approve everything while we are there with the tools and time to address their issues. It never happens! Usually, they won’t show up. Once, the man-of-the-house met with my installer as requested. Everything looked great to him, but of course he will have to go over it with his wife tonight?! Then, three days later, he e-mails another ten item punch-list. We finish that one, and they repeat the process! I don't have to tell you guys what it cost me to send a crew out two, three, and four times to punch-out a job after the primary install is complete.
Another customer, without exaggeration, is on his eight punch list! We have been out five times to attempt completing this job. There are more items on the list now than the second punch-list. He is never around when we are finishing up to approve things and pay. If he is around, he always has to get with the wife! This is getting old.
I have three jobs in the pipeline all with the same story. I have never had this before. Are these people playing games to avoid, or delay the final payment? Fortunately they only owe 10% or less at this point, but it is like pulling teeth to collect this. Any advice on this matter is appreciated.
Forum Responses (Business and Management Forum)
From contributor C: Here is the last line from one of my sales agreements. This is in the section clearly labeled "Payment to be made as follows." "(5%) $xxx.xx upon substantial completion of the installation of the cabinetry." Note two things that I do differently than you. First, I only leave 5% outstanding. The other payments all must be made before the delivery and installation date is scheduled. Yes, that's in writing.
Second, I use the phrase "substantial completion." I have never had a client hang me up on this. I even had some folks try to pay me before I finish. I politely refuse to accept the payment until I am done, but I am covered in writing.
Based on the issues your clients are creating, maybe you need to add some wording in the contract specifying that only one punch list will be accepted, when that is due, and how it is to be handled. The idea of adding more and more things just doesn't work unless you are having quality issues some place. I really think that the problem lies somewhere else, not in your quality or execution. Something is wrong somewhere.
From contributor K: The best way to handle punch lists is to set the expectation upfront on the first day of install. Explain that at the end of the install, they will be provided an opportunity to inspect the work completed and any minor items that fall within the parameter of the work that they want to be addressed would be considered their final punch-list. After addressing this final list, the remaining payment will be due. As you are nearing the end of the project, remind them again about the final punch-list and about payment being due. Absolutely include wording in your agreement.
We go one step further, we clip the doors back on, slide the drawers in (fronts already on), and make any adjustments on the last day when the punch list is complete (confirmed) and get them excited to see the final product and end on a high note with the AAH factor. This protects the fronts during different phases of install and also provides you protection for wacko's, as in most states, once it is hung, it is considered theirs.
From contributor E: I'd guess that the reason you are seeing more of these endless punch lists is because of the economy, and people either can't pay or are delaying it as long as possible. Also, you need to have that sixth-sense for the difficult clients, and estimate accordingly, and know when to say when. If you have satisfied the terms of your contract (see Contributor C’s and Contributor K's replies) then demand payment. I worked for a guy who took "the customer is always right" too seriously and it ran his business into the ground. Certain customers began to have unreasonable expectations, and took advantage of his goodwill.
From contributor J: Change your contract. One punch list to be submitted within 48hours. Payment is then due once punch list is complete. Then add no claims will be accepted when there is an unpaid balance. This still gives them the opportunity to find something you may have missed, but you don’t do anything until you get the last payment.
From contributor O: All these ideas are right. A punch list should be a final list, not a perpetual nightmare. I know those clients well. It is imperative that you include the "substantial completion" in your contract. They can hold 5% or whatever you agree on until finished. It should be stated that "payment is due upon final completion of punch list" and have them sign it. So many contractors are scared to ask for payment - why? You have done the work, but on the other hand you want a happy customer. So the only way to get past that is to clarify the terms in the contract. It's really all about the wording. Don't get stomped on.
From contributor L: Not sure when it is but at some point a punch list should become a warranty issue. Warranty work would be scheduled after payment in full of course.
From contributor I: Just to play a devil's advocate: Three of your current customers have had the same response to your installed work. Is there a possibility that maybe at least one of them has a valid issue? Put another way, if you were the customer in this transaction would you be happy with these issues unchanged?
If your work is indeed as good as you say then maybe it is more of an issue of customer expectation. This is still, however, something that falls within your purview. Customers buy kitchens once or twice in their life whereas you do this for a living. If there is a grey area in the contract it somehow seems as though you should be responsible for it.
From contributor G: I built custom homes for many years with a lot less ongoing punch list concerns that you are having, as is typical for the industry, I would often meet the customer for many hours and it seemed as though the whole mission was to pick apart the work. It’s an Easter egg hunt for what’s incomplete or unacceptable. It was arduous at best. I transitioned this task into a more proactive approach. I would set a time when the house was near completion to generate my own punch list. I would take every bit of four to five hours to walk through a 3500 square foot house noting every minor item. I would check every window for operation and complete with strip. I would open every cabinet door and drawer and note all items that I saw.
In the best built houses I can come up with six to eight legal pages of items. I knew that what stood between me and finishing was the list I had generated. I would tell my customers that I would meet them at the house to familiarize them with the house. When asked about the punch list, my reply was that I left my copy on the kitchen cabinet and they were free to add to it if they liked. Seems a bit smug at first, but after the customer saw my thorough list they would call me to tell that they did not see a fraction of the items I noted. They left the punch list to me. My one year warranty cost was generally less than $500.00. That's nothing for a custom home. Perhaps you should post a completion list that you generate and leave it in the kitchen for the homeowners to review - transparent and thorough. Anybody that is a critic of their own work is passionate about their business.
From contributor A: I knew a guy who used to do the lion's share of the punch list work for a very big builder in Southeast PA. He said he learned that by going through the house prior to the walkthrough, and making obvious, but easily fixable items as the people wouldn't look as hard for the silly items. His feeling was the closer to perfection the place was, the harder they'd look, because they had to find something. He'd get together with the jobsite guys and ask them to do small things - reverse the DW panel so it was the wrong color. Tack a smaller piece of crown with one finish nail, have it painted, and just before the walk through pull the piece of trim. Leave one end of the counter unfastened, and shim it high - leave a knob of a door, etc. He said it didn't stop it all, but it cut way down on the craziness, and he also said it made him and the builder look good, because they could call the next day and say it was all taken care of.
From contributor U: "In past years I have found that I am the harshest critic when it comes to our work. When I notice something substandard, I fix it. The customer does not have to tell me a thing."
I use to have a similar attitude and soon found that I was thinking my criteria for what was real quality, was actually a one person viewpoint. It caused me to think that what I accepted was ok, if the customer did not agree then they were wrong. I found that when I began listening to my customers complaints with the view that they really were valid, it was then I believe we started doing a better job. Also the "I am my worst critic attitude" caused my employees to feel like I did not value their input into our quality issues, and truthfully, I did not. My allowing myself to relearn to value the opinion of others in judging the quality of my work and our products, has allowed me to now have very few problems with customers picking us apart at the completion of jobs.
From contributor B: We have learned that the longer it takes to get back and finish a punch list the closer the home owner starts to look. Give them a reason and they will find things, do your job upfront and they are typically happy.
Our installers are in charge of their own QC. However I still meet with the home owner after the majority of the cabinets are installed. We go over items and I make notes for the installers and ask the home owners to do the same that night after I leave. The installers then can go in and finish the job with most of the owners concerns already addressed.
From contributor O: It is an attitude of "I know what is best" that comes with age and experience. We become comfortable with what we know, and nobody can tell us different. Sometimes a customer can have a valid point. Usually, the reason it bothers us is we know it is true deep down inside. Perhaps it is something we forgot to detail or a little paint spot is missed. We might use the "industry standards" excuse sometimes. I know it because I have done it too, and I am indeed the harshest critic of my work. I am always picking at the little things (bad habit in front of customers) and usually the customer says it is no big deal, that I am being too critical.
That is what I strive for. I want the customer to feel like I have gone above and beyond any "standards" and built my work to last for generations. If I find flaws they don't, I figure I am being detailed enough. Sometimes that might not be the case; we often cannot see the forest for the trees, and overlook something obvious to a customer. All we can do is our best. Maybe you had a bad group of customers - it happens. Hopefully it is not just poor work. I have no idea because I am not you. One final punch list is all you should need if you know how to do business.
From contributor U: Time and again I have completed jobs, gone over everything with the fine tooth comb, collected my money and went my way. For various reasons, often I left a tool or something, sometimes I needed to complete one little thing, but I will go back to the home and with rested and fresh eyes see things that I cannot believe I left undone. We do a lot of white product and I have over the years started calling this being "snow blind".
I work on most of our projects from cutting, assembly to painting and up to installing. In most cases I see these panels for seven to ten days straight. I have trained myself to let certain things go, things that really should not be issues, but some things get overlooked that shouldn't. Add the fact that I need to meet deadlines, keep the cash flow rolling, and make payroll on time so I can be very guilty of pushing the quality criteria. Another thing I have found is that sometimes I can justify in my mind why something may not be perfect, because I know and understand from being the professional how difficult it is to achieve what the customer is expecting. As my number one salesperson and wife keeps telling me, that really does not matter to a customer if they see something they don't like. Having a second person evaluation of your quality from someone you respect can be a key to keeping your viewpoint of quality well balanced.
From contributor P: In all business the benchmark is the customer. The most underutilized, more often than not, are the employees - especially their ideas.
From contributor Y: Contributor P makes a good point. The people that work for you have a lot of ideas about how things could be done. Not all of them are great ones but some of them are. The important thing is to recognize these ideas, praise them, and periodically implement them, if only to keep the ideas flowing and the sense of engagement intact.
From contributor S: As a general contractor, I hire out most of my cabinet work. I tell people up front to expect a ding or two, maybe a cracked cope/stick joint. But this is a "service" item and in no way affects substantial completion.
From contributor K: Funny thing is we have "substantial completion" in our agreement also. I don't want to get into a discussion with customers about what that means and end the whole project on a sour note. To avoid it altogether, you are better off setting the expectations of what a punch list is. It is an opportunity for the customer to provide a list of items, from their perspective, that needs to be completed. That said, it is not punch lists, it is a punch list. Once that list is complete, give me my check. Anything past that point is what service calls are for. Is there anyone here that would not go back and take care of an issue the client has? As long as you set the expectation upfront, the client should have no confusion of what the difference is between a punch list and a service call.
From contributor F: We did a superior alder (not knotty) kitchen last year. Upon the callback there were yellow Post-it notes stuck all over the ff's and door/drawer fronts with arrows pointing at every tiny tight pin knot of about 1/16" or less. There were zero knots in the entire kitchen of any noticeable size. Some people are so picky they don't even accept that wood is a natural material. We did replace one door that had about a 3/16" tight knot. We had to do some educating on the rest. You can never educate the customer too much up front no matter what you think they know!
From contributor M: Here’s my way of wording it. Wood is a natural material and generally speaking studio woodwork is either crafted by hand, and or hand crafted with the assistance of machinery. As a result minor inconsistencies in material, dimension, and finish are not considered defects. Dimensional changes as a result of seasonal movement can at times be noticeable are considered to be normal. Certain traits found in wood that are sometimes considered to be defects may be left in place and or featured for their unique “character”.
