One of the most pressing problems in running a small business is getting paid promptly. In a business like Window Cleaning there are a number of customers that pay immediately. And when your focus is on cleaning houses, you might get paid right away nearly all the time.
However, my business while including residential, has its main focus on cleaning businesses. Many of these are billed and mail a cheque to my office.
How do you get your customers to pay in a reasonable amount of time? Many business suffer, while they are doing a lot of work, a lot of their money is tied up in accounts payable, and people taking weeks or months to pay. That really drains your business, and could stop you from running a profitable business.
Let me share a couple ways that I keep my accounts payable under control. Perhaps you can implement these suggestions for your business.
State Terms
It is important to state at the beginning what you expect in terms of payment. The time that you expect payment, for example, on receipt, or 30 days. Be clear, state upfront what you expect in regards to how and when you get paid.
For our company, I always say due on receipt. I expect payment promptly and I don't automatically give them 30 days to pay. I expect them to take my invoice, and on the day that they usually write cheques, within a few days they will write the cheque and mail it to my office.
Keep Good Records
There are many programs that permit you to keep your business organized and to create invoices and monitor accounts payable.
I use Quickbooks Easy Start for my small business. It keeps everything organized for me, my banking, invoicing, payment, and accounts receivable. With the click of a mouse I can see how much overdue an invoice is, I can easily email reminders, copies of the invoice and so forth. If you aren't organized you can't easily catch those who are taking too long to pay.
Remind them
After 14 days I remind the customer by email that we haven't received payment. I don't at that point say it's overdue, but I say in a nice, kindly written email that we haven't received payment and we are reminding them. I write down the invoice number and date too, and email them another copy of the invoice.
After 30 days, I email them, saying the invoice is overdue, that our terms are payment due upon receipt, and ask them to mail the cheque immediately.
If we still don't receive payment, I call them personally, in the rare instance that that doesn't work, I pay a personal visit.
Give Lattitude
You do however have to be reasonable. One of my customers is Burger King, and the cheque comes from Miami, which is far away from Toronto, ON. So I realize that it will take time for my invoice to go from the managers hands in the mail to Miami, thru Miami back to my office. I give that customer 30 days before I remind them.
Does this work?
My experience with this payment system that I implemented in the spring has been very positive. I have only three customers that take more than 14 days to pay, namely that Burger King, a dealership that has gone bankrupt, which I'm not even sure I'll get paid, and one other company.
All others pay within a week to 14 days. One customer actually pays us through electronic payment, which is incredibly fast.
Remember, it's your money. It's not rude to ask for your money to be paid to your business in a timely manner. By all means be reasonable and kind when reminding customers, but as the saying goes the squeaky wheel gets the grease, if you are not asking for your money, you may be the last business to get paid.
Thanks for reading my blog.
If you are in the Toronto area and want your windows cleaned, call me, The Toronto Window Cleaner at 647-409-8144
However, my business while including residential, has its main focus on cleaning businesses. Many of these are billed and mail a cheque to my office.
How do you get your customers to pay in a reasonable amount of time? Many business suffer, while they are doing a lot of work, a lot of their money is tied up in accounts payable, and people taking weeks or months to pay. That really drains your business, and could stop you from running a profitable business.
Let me share a couple ways that I keep my accounts payable under control. Perhaps you can implement these suggestions for your business.
State Terms
It is important to state at the beginning what you expect in terms of payment. The time that you expect payment, for example, on receipt, or 30 days. Be clear, state upfront what you expect in regards to how and when you get paid.
For our company, I always say due on receipt. I expect payment promptly and I don't automatically give them 30 days to pay. I expect them to take my invoice, and on the day that they usually write cheques, within a few days they will write the cheque and mail it to my office.
Keep Good Records
There are many programs that permit you to keep your business organized and to create invoices and monitor accounts payable.
I use Quickbooks Easy Start for my small business. It keeps everything organized for me, my banking, invoicing, payment, and accounts receivable. With the click of a mouse I can see how much overdue an invoice is, I can easily email reminders, copies of the invoice and so forth. If you aren't organized you can't easily catch those who are taking too long to pay.
Remind them
After 14 days I remind the customer by email that we haven't received payment. I don't at that point say it's overdue, but I say in a nice, kindly written email that we haven't received payment and we are reminding them. I write down the invoice number and date too, and email them another copy of the invoice.
After 30 days, I email them, saying the invoice is overdue, that our terms are payment due upon receipt, and ask them to mail the cheque immediately.
If we still don't receive payment, I call them personally, in the rare instance that that doesn't work, I pay a personal visit.
Give Lattitude
You do however have to be reasonable. One of my customers is Burger King, and the cheque comes from Miami, which is far away from Toronto, ON. So I realize that it will take time for my invoice to go from the managers hands in the mail to Miami, thru Miami back to my office. I give that customer 30 days before I remind them.
Does this work?
My experience with this payment system that I implemented in the spring has been very positive. I have only three customers that take more than 14 days to pay, namely that Burger King, a dealership that has gone bankrupt, which I'm not even sure I'll get paid, and one other company.
All others pay within a week to 14 days. One customer actually pays us through electronic payment, which is incredibly fast.
Remember, it's your money. It's not rude to ask for your money to be paid to your business in a timely manner. By all means be reasonable and kind when reminding customers, but as the saying goes the squeaky wheel gets the grease, if you are not asking for your money, you may be the last business to get paid.
Thanks for reading my blog.
If you are in the Toronto area and want your windows cleaned, call me, The Toronto Window Cleaner at 647-409-8144
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