Five Tips to Get You Paid on Time
Get that cash flowing!
Cash flow is crucial for the smooth operation of your business! Without money coming in regularly and reliably, paying overheads (like your employees’ wages!) becomes difficult.
And when customers don’t pay on time, that cash flow becomes disrupted. Financial potholes like that can become much bigger issues down the line, so it’s important to be proactive to ensure your incomings and outgoings match up happily.
We’ve teamed up with the knowledgeable Sian at Tradie Terms for these five insightful tips that might just get you paid on time!
One: Charge a booking fee for call-outs.
A call-out service is very common amongst trades businesses. Sian recommends that for relatively routine jobs that will take less than half a day, tradies charge an upfront fee to secure the booking and then take payment for any extra time and materials used immediately after the job is done.
The administration time spent on issuing and then chasing up invoices can quickly eat into the margins of your jobs. To avoid this, tradies can create a “booking fee” of the call-out fee plus one hour of time, so that the initial attendance is paid for and the slot is secured for the customer. The balance of any additional charges can then be paid before departing, so there’s no chasing up payment.
Tradie Terms can help you to add a minimum fee clause into your terms of trade to make sure all of your billing practices are above board.
Two: Take card payments.
Once that initial hour included in the booking fee has been used up, added charges accumulate. And if possible, Sian recommends that you secure payment before you leave the job. But how?
There are many different options now available to allow tradies and other service providers or sellers to take EFTPOS payments on the fly. You may have seen some of them pop up at farmers’ markets and similar events. Often, they use a small card reader device linked to your phone to process payments from debit or credit cards. You can talk to your bank to find a solution that suits you—and don’t forget to always have a phone charger on hand just in case!
Your VA can help you to link card payments to quotes or to your job management software for easy reconciliation. Tradie Terms can add card payment terms to your documentation, allowing you to collect payment online.
Three: Jump on the subscription model
Many businesses are offering subscription-based services. Tradies who supply regular work such as maintenance, lawn mowing, electrical testing, and other routine servicing could consider offering subscriptions, too—a fixed monthly fee to include agreed-upon regular repeat services, paid automatically. Even annual services can be paid in monthly installments to reduce the all-at-once cost for customers.
The subscription model is very conducive to good cash flow. A predictable amount of funds coming in dependably each month makes it much easier to plan your outgoings. Tradie Terms can help you to add service plan terms and conditions to your site and your general terms.
Four: Don’t forget the deposit
Our first tip mentioned a “booking fee” for call outs that included the call-out fee plus the first hour of work. This one’s along similar lines: for larger projects like new builds or renos, always take a deposit! This secures a spot (or spots) in your schedule and means that you aren’t working entirely for free until the client gets around to paying the rest. You are compensated for the quoting time and can use the deposit amount for some of the resources you need to start the job without “borrowing” too much from yourself, improving cash flow.
Your terms will need to be updated to include your right to take a deposit. Your quotes should include adequate wording in the footer to alert customers to whether a deposit will be required—Tradie Terms can make sure that you have everything set up correctly.
Five: Keep your customers informed and up to date
Communication is key when it comes to getting paid quickly! Your customers should know every step of the way when payment is expected and how much their costs will be. From prompt and accurate quoting to regular reminder emails and clear payment instructions, good comms are very effective.
Your quoting software will likely have features that allow you to keep your customers updated. You can schedule reminders, tailor wording to suit you, and set up welcome emails which lay out clearly how your payment system works.
Ask your VA to check whether you are using the quoting capabilities of your software in a way that will reduce any questions or confusion around payment—and check out Tradie Terms’ email onboarding kit that is included in every terms of trade kit purchased.
Getting paid quickly as a tradie makes it much easier to operate. There are resources available—plus changes you can make—to increase your chances of receiving your funds promptly. Job management software features, mobile EFTPOS devices, the expertise of experienced virtual assistants, and the templates and services on offer at Tradie Terms: between all of these, you have the tools at hand to get that cash flowing and get paid faster.
Tradie Terms is a service that supplies tradies with Terms of Trade. Offering tailored, instantly downloadable kits that your trusted VA can implement into your quoting or job management software is what helps our army of tradies get professional and protects their profits.
