For me it’s been receivables - commercial work pays net 15-30 sometimes 45 days so I bank on the resi as a cash flow but when i have do start chasing my bills i can go a week or two at a time only pulling in enough to pay the help and by the time i get my checks they’re already spent.
I know some of you take up front deposits but a lot of my customers get weirded out when i ask for a credit card. I’ve even caused some tension from long time customers by asking for payment a few days later (how dare me). This has definitely caused me to struggle in growing my business. I’ve gotten tougher these past few months being firm about money. I Should be writing this post from a tropical island with this past years numbers. But I’m here in cold nyc.
I’ve hired a girl part time to handle the recievables as part of a solution to the problem cause I can’t deal with the stress of chasing bills and it also keeps my relationship with the customer strong and professional. Also when I was the “new company” in town I was afraid to be so direct about money cause I didn’t want to lose the customer, I realize that this was a huge mistake and hurt me bad.
I’d like to hear if any of you have more advice on this issue.
I’d also like the hear what kind of issues have stunted your company’s growth and what have you done to fix the issue.
The only thing I can tell ya is that you need to know what the payment agreement is before you take in the job if it’s net 30 or whatever you agree upon then that’s when you need to get paid, an should get paid I know it doesn’t always happen that way . You need to be on top if these people. If you have given them an inch I’m sure there takin it like you said. I would first start by sending a statement at day 32 if a net 30 then a phone call . All your doing is putting in a friendly call hi this Haim from … I’m just calling to see if you guys sent out the payment for Junes service if not when do you think it’s going out . There is nothing wrong with doing all these things it shows that your on top of everything an that you would like to get paid . Who likes to work an nit get paid on time the people you service like getting there pay check on time . What I found was once you show that your on top of it most customers will send out payment in a timely manner if there repeat business . They don’t want your phone calls . If it bothers them or freaks them out who cares it’s business I’m not looking to be your friend . Trust me there use to these calls anyway if there late all the time . If they don’t pay by next service on big accounts then don’t do it .
I know of a window cleaning company that implements a late payment fee. Trust me they send me one when I’m late in paying them a 50 monthly account I sub them. My wife is like are you payin them the late fee . No you are your the one that is late paying them. Na screw that I do laugh when I see it though were usually never late with there payment though
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Sorry i meant payment not invoice
There is an old saying squeeky wheel gets the oil. Once you put that phone call in an your asking them when do you think you could get a check out, an it doesn’t come you need to put another phone call in if it doesn’t come after that other phone call .I’m not saying be mean it’s a friendly phone call. Hey it’s Haim again I never recieved that check you guys said was being sent can you look into that for me. Awe thank you so much. Have a great day
Plus arnt you in Brooklyn. Don’t you know some people Goodfellas: Fuck You, Pay Me - YouTube
Call pauly Haim
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Thanks for the input. There were definitely times I thought about calling pauly lol. I would do all things you said above, put in a phone call, work out terms from the get go for example payment is to be made after you receive the invoice and when you call them they tell you it’s been processed already you should have it by now, sure enough, net 30. Drives me nuts. I just need to know when. Don’t leave me hanging.
Yes but you didn’t read my whole post maybe it’s cause I bore you. I did say all your doing is putting in a phone call a friendly one … Once payment is late if there going to replace me for that them so be it. That’s business when thinfs arnt returned in time or when your late with payments phone calls get made. I’m not saying call up with an attitude. I have made these calls dozens of times never lost one of them. They know they owe me an for the most part the people I called are now on time
Phone calls lets customers know your going to get these when your late an most don’t want the calls
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This is a good point. I’ve thought about giving people a discount if they pay same day as an incentive but am reluctant to implement it because the customer might get insulted from the offer, I’m not getting that great idea feeling from it but i may be wrong.
I have a full time job that stands in my way. Not to mention a cold 5 month winter season. The fact that I don’t spend any real amount of $$ on advertising doesn’t help either.
At some point I’m going to have to make some hard decisions as to where I’m planning on going with this.
This is some honest talk here. I need to update my business plan I made 5 years ago.
A friend just told me about a company that will buy invoices for 3%. That sounds like a steal for those customers that frequently give me headaches, and it sure beats hiring an employee just for accounts receivables.
To answer the question at hand: I AM the bottleneck. I need to surround myself with talented people and die to myself and actually delegate authority and not micro manage them. I think I would see 100% growth or more for a couple years if I do that. I have one key hire in the works already.
@G & R Mobile Wash / Gerald: I’ve got the same story as you (I won’t be cleaning windows till the end of April), fortunately I have a very flexible full time job and window cleaning fits in well. If it didn’t, I would have to make a choice whether I wanted the freedom of running my own business or the stability of a pay check and all of the benefits that go with it. There is no doubt I could probably double the size of my business, but along with that would come growing pains and more importantly, risk. I’m virtually in an equilibrium where I choose whether or not I will take on any new customers, I have come to the realization that I can not clean every window. I’m potentially six years away from retirement so I can make the decision where I want to go with my business when that time comes. Right now I feel I’m in a position where I can really enjoy life so that’s pretty much all that matters. I’m not one to chase the all mighty dollar like I used to.
Humm, where are your AR problems? Commercial or residential?
If it’s residential - get a credit card swiper. Paypal will give you one and people are more likely to buy upsells if they can put it on the card. Definitely get paid at the time of service with residential or else it’s going to be hard to collect.
If it’s commercial and a monthly account: as soon as you do the job, have your girl send them an invoice the next day.
If it’s a weekly or bi-weekly account: send the statement out as soon as you want to get paid. I don’t mind sending these out at the end of the month.
But one thing you might try this year is with your commercial accounts, you should probably try and raise your prices every year so they don’t expect to have the same prices 10years down the road. So offer to keep them at the same rate (or if you’re not raising your prices offer a 5-10% discount) if they prepay for the year. It helps that they know you come on schedule and are faithful about it.
Next time I’m wrangled into a construction clean, I’m going to require 30% up front before doing the work. That covers my payroll while I wait the 60-90 days for the profit.
My main problem is in residential. My biggest months are may-June and sept-oct In May and June im prepping summer homes and in sept October I’m prepping winter homes so the customer is not around when I do the work , that’s what makes it hard to collect 1. Bec the customers not there 2. we are responsible to notify the homeowner if there is anything extra that needs to be done and charge accordingly. I have a square reader. Some customers love the option of credit card but most prefer check or cash. That’s when it gets hard to collect.
That’s cool. You have a unique gig. Is there a lot of variation between years? I mean could you call them and say “We did this and this last year and the price was $. But this year we’re raising our prices due to whatever, and we’re running a special for our loyal customers. We’ll do the same service we did last year for last years price if you would like to prepay…”
Or maybe offer them a discount on the same service if you’re not raising your prices.
I mean, if I had a vacation home, I’d appreciate someone calling me up and saying “we can do the same thing we did last year” because I was happy with what they did last year and I don’t have to think about it.
But if you could get half of them to prepay, your AR wouldn’t be a big issue.
I’m also currently evaluating mHelpDesk and I’m really excited about some of their features. Like you create the work order, you can use the app to add services, time the job, etc. And then when you invoice the customer, you can email them the invoice and there’s a nice paypal button down in the corner. The customer just clicks on it and it makes it easy to pay. So I’m probably going to use them for my cms this year. I’m really impressed with their platform.
If you email them, you can certainly add a paypal button pretty easy too.
One of my commercial accounts told me that it takes 2 weeks to get a check to me. That if I wanted my check at the completion of service , to send the invoice 2 weeks before and they would have it ready the day of completion. Just a thought, can you send them then invoice before so they can have your check ready the same day ?? It was their idea , not mine
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Hey Mike what is your procedure for AR . Tactful & Consistent is a Vague answer. It would be good to know I’m always open to new ideas .
When I started my business my AR was really bad . I had a friend of mine help me he was making all the phone calls, an keeping track of everything for me . The problem was he was in collections he worked for a leasing company so his technique wassnt the type That fit for my type of business. I didn’t realize this until I got a phone call from a customer 45.00 a month in the rears 4 months. She called me up very pissed wanting to know who the hell we thought we were . I calmed her down letting her know I apologize for any disrespect she feels we caused . The guy is just doing his job… not properly so I will have a talk with him.I told my friend man listen this is not someone who owes me on a leased car it’s repeat business you can’t approach it that way you do in your business. Now I love this dude who was helping me out free of charge, but he said to me you want ya money don’t ya . Right then I thought na I can’t let him do this anymore. So I took over . Btw I didn’t lose that job!
All I do when someone is late with a payment is: 1. Send a statement with next months invoice . If it’s s small amount customer that’s all I do for that type, then wait to see if they send both invoices the next month 3 months past due for small jobs gets a phone call. Here is how the phone call goes. " hi how are you this is Mike from Majestic I have some open invoices that havnt gotten paid did a check get sent out yet for these and/or is it possible we can get paynemt on these . That’s it plain an simple nobody has canceled service ever for this an quite honestly if they do just because I’m calling an asking for my money that they owe me that there late on paying me then screw them they got the problem not me, and yes I value all my customers I also value the time it took me to clean them.
If you give someone an inch they will take a yard , don’t take these statements in a hard way. Squeaky wheel gets the oil. These don’t mean call an nag an be nasty. The truth of the matter is there is an accounts payable for most big companies they don’t mind you calling an seeing what’s goin on with payment . My expeirance has been quite pleasurable an lets not forget your getting to know the people in charge of sending out your check also. Your building a rapport with each phone call. Now that’s for ongoing servicess
All my residential pays me that day period. I’m not leaving without a check. Never had never will especially a new customer. Any new big corporate jobs that are net 15-30 whatever if its net 30 I wait to 35 then a phone call . It’s like micro managing your money net 30 is net 30 not 35 I have a right to call ,an find out what’s going on they understand that .
So what’s your procedure !!! It sounds like it could be good. Tactful and cosistent what does that mean?
Let me finish this up by saying no matter what. In the service business other than resi work. You will always have money on the streets. All you can do is minimize it !
Oh one more thing checks do get lost in the mail an have . So your also akin if an when a check got sent out !
Sorry I keep adding one more thing that’s new guys must understand businesses go out of business there is nothing worse than someone owing you 3 months worth of service then boom ther gone . If you think they will tell you hey next month were gone your bein naive . Oh we talk an he and I are so friendly with each other. Lol ya ok sure . this happens all so often in the storefront sector . Trust me so don’t walk on eggshells when it comes to getting paid.
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If you feel like a break from the cold, come on out to Palm Springs CA between Nov to March and jump on a truck with one of our team members. We’d benefit from your experience and you’d get a “paid vacation”, (ok, maybe just a vacation from the cold).
