Are You Getting Paid
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.
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.
In a few cases, I do allow them to take 30 days to pay, but I usually don't state that so that I still keep a fire under them to pay faster.
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 Professional 2012 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.
I also use an accountant to keep my sanity! Some things are just too complicated and time consuming for me to handle.
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.
Does this work?
Most of my customers pay very quickly. You are the one to state payment terms, don't shy away, dont cower. It's perfectly normal and reasonable to have strict payment terms and very few are going to question it.
Remember,
it's your money (more or less). 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
Check out my website
http://mmwindowcleaners.com
