As someone who has been working for decades with Tradies, I know there is hardly any problem that worries you more than not being paid on time.
Cash flow is the life-blood for small trades businesses. You worked hard to win that job and have shed some sweat to get it done on time and as needed. But when its pay time, all the client is doing is making excuses.
Late payment don’t only effect your business cash flows but also your mental well-being.
If you take a closer look, maybe there are a few things you can do to safeguard your rights, minimise the business risk associated with late payments and have peace of mind.
It’s time you transform the way you run your business and give customers the flexibility and ease to make payments faster.
A successful business doesn’t take just any job that comes through, but carefully chooses who they want to work for.
Do you seek trades referrals from mates or check out customer ratings that other Tradies have given to a customer you are planning to work for? If not, it’s about time to shift from using your current systems and turn to technology to make more informed decisions.
Just the way customers can rate your service, i4Tradies is a first of its kind platform that allows you to rate customers too, so the next time a Tradie works for them, they have the peace of mind of getting paid on time.
Additionally, there should be a more calculated way of doing this also. If it’s a bigger project, do a deeper research. Go to credit reporting agencies that can look up credit ratings and recent payment histories of your potential clients.
It can be a tough call because sometimes you just need the work, but setting up expectations early will definitely go a long way in safeguarding your rights and possibly avoiding a brawl with the customer.
When it comes to avoiding unpleasant confrontations, transparency in communication is the key. A transformative digital platform allowing you to send detailed quotes and invoices is the way to go. So start by listing your payment terms when quoting and explicitly state on your invoice that it is under the securities of payments act.
If the client doesn’t want to do business on your terms, trust me, you are still better off, than losing sleep over owed money. Shield yourself with terms that would scare the hell out of someone with a bad payment record.
I’ve seen Tradies spend too much time and money chasing late payments, which results in turning their focus to running the business, rather than growing it.
The penalty late payers would be charged is actually the cost you incurred by not being able to buy supplies for work already in the pipeline, giving out wages out of your own pocket and losing your sanity chasing the money.
Most of the times people are not acting bad intentionally but simply push back money owed because this may not be in their priority list or the information you have given is too hard for them to verify in a short period of time that they have during the day.
So here’s something I have actually seen work wonders in the trades industry. Rather than scaring them with a late payment fee, encourage them to pay early and avail a discount.
Also, give customers the flexibility to pay quickly with online payments. Every time you send an invoice to customers, i4Tradies app prompts them to click on “Pay Now” button on their app, so your customers can just get done with it and don’t leave it for another time.
Yes, it can be tempting to leave all the invoicing for the weekend because you have already so much on your plate for the day, but if your business is already suffering from late payments, it’s time to develop some good habits!
Time to bring some efficiency into your business, claim back your work-life balance by eliminating paperwork and creating fast electronic invoices. A job management software like i4Tradies that fully integrates with account managing platforms like Xero and others can help, allowing you to bring all customer data in one place when invoicing and accepting credit card payments.
Disputes with customers can arise anytime during the job and when things aren’t clear and records aren’t kept, anyone can take advantage.
A good way to avoid this is to have visibility throughout the job and a complete historical data of all communication, variations requested and invoices sent, to be retrieved on demand.
i4Tradies not only leverages emails and texts for this purpose but also maintains a complete customer job history from quote to completion.
When you can back track when the job started, hours worked, labour employed, rate per hour and invoicing records, it leaves little room for anyone to avoid to dodge the payment. You never know when you will need those details in case it becomes an ugly legal battle. Limit your liability by keeping everything in writing.
Whatever you do, don’t give up. Reinforcement can work wonders. If you are already using an invoicing software, make the most of it by sending polite reminders to customers when a payment is due.
If you are offering a discount on early payment, send a reminder to tell them “avail a discount on your early payment”. If you are penalising for late payment, send them a reminder saying “please make the payment to avoid a late-payment-fee”.
If the payment is late, you are probably already calling the client and sending emails. Set your invoicing software to send automatic reminders every day, without losing your sanity.
If you are working for commercial clients, Late Payer List is a B2B platform to get outstanding invoices paid fast!
No one wants their name to be listed on such a website for everyone to see. It always works. It comes at a minimal amount to join and list the debt that you want to get recovered.
Given that you already have iron clad terms of trade, if the customer keeps on ignoring your payment reminders, you can issue a letter of demand. This will get their attention! It's a quick way to recover your outstanding payments without the cost and hassle of litigation. Make sure everything you are demanding are in accordance to the T&C and is signed and dated correctly.
If that fails, try approaching a debt collector. You will be amazed to see how people respond when a demand for payment comes from someone other than you. Debt collectors would charge a small fee when the payment is recovered and you will almost never have to go to court.
Late payments can eat up your business like a plague. But if you have the right systems and processes in place, you will never really get to the point where you need to approach a third party to get your outstanding invoices paid.
Unfortunately, if you are already there, you have got a serious problem and you need to review the way you are running your business.
i4Tradies is a first of its kind technology platform that can avoid loop-holes in your existing system and improve your business processes to help you get paid faster!
Remember, you have worked hard on a job and you deserve to be respected for your work with a timely payment. A few changes in your business processes as to how you communicate with your customers and keep evidence will not only safeguard your rights but also significantly improve your cash flows.