People, even business owners, sometimes feel bad asking for money that they are owed. As a whole, we hate talking about or asking for money. Even if we provided a service and we are well within our rights to do so. But, think about it. When you go to a restaurant and order a meal, you are expected to pay right away. Same goes for when you get your car fixed at a mechanic. You can’t take your car until you pay for the service. And that new haircut you just got? Well, your barber didn’t agree to send you a bill for it, did he? No.
So, it goes without saying that you and your employees should not be shy when asking for the money you are owed when you perform service. If you are a residential service provider you should be collecting the invoice immediately upon completion of the service.
How? Set up a “checkout counter” of sorts in each of your service trucks. This checkout counter can be equipped with a calculator, invoice slips, and maybe even a cash bank or credit card terminal so your employees can take these sorts of payment right there. You could even invest in a software application that will help you streamline and automate this process – one where you would be able to accept credit cards and print out invoices right on site.
This will benefit you in a variety of ways. First of all, by having your customers pay right away, you can account for that revenue right away. You may spend hours upon hours each week trying to reconcile your Accounts Receivable. However, you’ll always have those people who try to ditch out on payment. You can try and try to keep collecting from them, even getting a collection agency involved, and you may never get paid for the service your company already provided.
Also, if you make sure to collect payment right away, you’ll avoid the cash flow problems that come with A/R. If you don’t have the cash to run your business, your overall business will suffer and you won’t have the means necessary to grow your business to the heights you’d like.
If the thought of always taking payment from your customers right away makes you queasy, you could also check into setting up a financing system with a bank where approved customers can open a line of credit and pay for the service right away. That way, you’ll receive payment right away and the customer will ultimately be responsible for paying back the bank they financed through (with interest, of course). This may also help open your company up to a segment of customers you would not have been able to service otherwise.
Ultimately, it’s in your best interest to collect payment from your customers right after the job is completed. At the end of the day, you’ll have fewer financial headaches and your business can continue to grow.
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