Content provided by Matt Moskowitz, AMERICAN PROFIT RECOVERY, an Indiana PHCC member
When you're running a plumbing, heating and cooling business, receiving last minute calls is just a way of life. That panicked customer in the dead of winter, or the thick of the summer heat needs you at their home immediately.
Of course, there are larger jobs that are more planned such as the installation of heating and cooling systems, but you must agree, “fixing things” is just part of the business.
It's when we're called out in an emergency that we need to be extremely mindful of how we are going to get paid. Because in most cases, these are the calls and types of work when customers don't always pay you on time.
The backbone of any small business, including yours, is cash flow.
Here are some simple ways you can improve your odds of getting paid on time and avoid negative cash flow.
Whether it's 10:00 AM in the morning or the dead of night, when that customer calls especially in an emergency setting, you must communicate those payment expectations. While it may be uncomfortable when the customer is in a bit of a panic, it's just part of doing business. Some key points include hourly rates, how and when you expect to be paid, and the methods you accept payment. Do you and your business a favor and make sure you and the customer are on the same page when it comes to money.
The more payment options your business offers, the better off your chances are of getting paid in a timely manner. When you communicate your payment expectations to your customer, make sure you explain to them the many ways they can pay their bill. That can be in person, on your website or good old fashion mail.
If for any reason your customer cannot pay at the time of your service, it is once again an opportunity to have an understanding about paying your business promptly. If possible, always leave a detailed invoice before you leave the property and if payment is not received within a short period of time, someone from your office should be following up promptly and tactfully. Make a phone call and arrange for payment.
Every business has customers that do not pay for various reasons. So, whether you are a plumbing and heating professional or veterinarian, every business should have procedures for customers that are delinquent. The basics include follow-up procedures internally such as phone calls, emails, texts and regular statements. At some point, such as the 90-day mark, it's important to involve a reputable collection agency. If you are like many businesses that serve customers on short notice, you probably have a regular need for a collection agency that understands your industry.
It's a smart business decision to already have a relationship with a collection agency that will treat your customers with the dignity and respect they deserve, which will improve the chances of repeat business. The goal of collections should be to get paid AND retain customers.
