Are you getting paid promptly?
Here is some information on how to improve you cash flow and cut down the stress surrounding trying to get money for work that you have done.
This will help gardeners, window cleaners, odd job men, small builders and applies to anyone who does regular work and may not always see the customer at the time of doing that work. You may just be starting out or you might have been in business for yourself for many years, the payment problems you will experience or are experiencing are the same the world over so the first thing to understand is you're not on your own.
Simply, you can split your customer base into three categories from a payment profile situation:
1 First rate payers who will go out of their way to ensure you get paid on your regular visit.
2 A bit forgetful and does not seem to appreciate that the money they owe you is what you live off.
3 Avoids paying you whenever they can and always questions the balance that has built up.
Clearly we all would like to have everyone of our customers fall into category one, and my only comment about this sector is always put them first, never do work for someone who you know to be a poor paying customer before a good paying customer.
I will come back to category two, but I just want to offer my advice regarding category three as it is not very lengthy - Don't do it!
People who don't pay you to this extent generally will not appreciate what you have done and could not care less about how you survive, and, in almost every case there will not be much you can say or do to change their attitude.
Category two will probably make up around 60% of your customers and it is here you need some gentle professional persuasive methods.
I would always advocate that from the start of any business relationship you establish "the rules of engagement” never be embarrassed, afraid or reluctant to discuss payment terms at the earliest opportunity as this sets the tone for your future trading relationship. If you put more effort into establishing how each individual customer will pay you at the start of your relationship you will almost certainly collect your money in a timelier manner. Be flexible in the ways in which you can take payment, whilst cash might be best for you it does not suit everyone so consider cheques and standing order payments, the latter can be set up easily and a 5 minute discussion with your bank will give you the facts on how to organise this one. Also don't be afraid to ask people to leave your payment in an agreed place if they are likely to be out when you call to do the work, a lot of time and effort can be wasted in call backs to collect the money you are owed.
Whilst the effort you put in at the start will set the tone and definitely help, you will still have customers who just don't seem to remember and are often out at work when you call, here's the tactics for these people.
Buy some professional quality business cards and have printed on the reverse: I called today to do your garden (or what ever) the balance you owe is £x.xx I would be grateful if you could settle at your earliest convenience in the normal agreed manner. Then push it through the door.
This is what I call the gentle reminder, to have the desired impact don't just push a scrap of paper or something that is poorly printed and does not look or feel good through the door, it is important that when dealing with outstanding monies you are seen as being on the ball and professional.
A section of your customers will still not respond as you would like, it is inevitable that they will take more time to pay up, this calls for an escalation letter. To have the best impact you need it to be well written, to the point, and it should contain the following:
Customer name and address.
A short explanation as to how you would be grateful if they could settle the outstanding amount.
Suggest a different method for future payment.
Again it will not have the desired impact if your letter is of poor quality, invest in some professionally printed letterheads, it's a good idea to have these matched to your business cards, you don't have to spend the earth for such products and they are widely available on the internet - a good site is www.betterprint.co.uk
If you continually send the escalation letter to the same customer and no matter how much time and effort you spend they just don't change their habits, then they have fallen into category three and you should follow the advice above and - don't do it.
I hope this blog offers some practical advice that you are able to use to your benefit, if so let me know.
Or comment on how poor paying customers affect your business.
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