For a trades business owner, cash is king
We all have been there! We all have heard those lines at least once. We all know that chasing unpaid invoices isn’t much fun! For a Field Services business owner, cash is king . Late payments can hinder business growth, not to mention the sleepless nights that come with it.
When you go the extra mile for your customer, providing outstanding service stretching your work hours, late payments put a significant cash flow pressure making it difficult to make your own ends meet. Yes, not everyone pays on time, and this is a challenge you face occasionally.
However, you know you have a problem when you spend more time chasing payments than on your business growth . So, we asked our friends in the industry what the most common excuses they have heard for late payments and some of the answers we got were so lame, it left us flabbergasted.
Here are the Top 15 lamest excuses property occupants have made:
1. "We will pay you as soon as our customers pay us"
2. "Our cashflows are tight because of COVID. Let’s settle this once the situation improves"
3. "We are out of country at the moment"
“We can’t do a bank transfer as we are out of the country”! For heaven’s sake! There are a zillion other ways to send money if you want to. That’s the lamest we have heard so far.
4. "My bookkeeper is on holidays"
While this can be a valid one since some people prefer two-person authentication for all transfers, it can at times be a diversionary tactic that can drag on for some time.
5. "We went on vacation and went above our budget. Can you give me a month to sort you out?"
Don’t you think you should have postponed the vacations if you didn’t have money to pay your outstanding bills?
6. "I won’t pay as I didn’t like the work"
Ever heard of being counter charged? A common tactic by builders that don’t want to pay the subbies and instead want to charge you pointing out things that ‘according to them’ were not delivered as expected.
7. "I’m sorry, but there is no money left in the float"
When you are working with authorised service agents in real estate, the most common excuse is that there is not enough rent money left to pay and you end up waiting for another month.
8. "I didn’t get the invoice. Are you sure you sent it to the right email address?"
You are left grinding your teeth when the customer says they didn’t get the invoice and your accounting software tells you that the invoice has already been viewed.
Seriously?
9. "You emailed it to the wrong person"
This is an oldie among habitual late payers. What’s even more frustrating is that the correct email address happens to be the same one to which you sent the invoice earlier.
10. "Your system must be wrong. I have already paid."
But we didn’t receive it. Can you please send us a screenshot of the transfer?
No reply!
11. "Oh shoot. I completely forgot. Sorry about that. Let me sort it out ASAP."
Really? Even after 3 reminders?
This one doesn’t get old.
Okay! We are reminding you again, can you make the payment now?
12. "My Son/Wife/Mom is in the hospital, so our budget is out"
Family emergencies happen, but these might be true 5% of the times and rest are just excuses. Please know that our sympathies are with you and your family but we too need to pay wages and put food on the table!
13. "We have been really busy and couldn’t find time to sort this out"
Please name someone who isn’t? Would appreciate if you could take out 2 minutes out of your packed schedule to make payment.
14. "I have to ask my partner before I pay"
Things can go haywire when someone orders a service and someone else is responsible to make the payment.
15. "I can’t pay as the invoice is incorrect"
You feel like pulling your hair out when they say that you have the incorrect business name, address, amount or any other detail on the invoice after its way past the due date.
Now that you’ve had it with these lame excuses, let’s look at what you can do to fast-track your payments:
Avoiding late payments:
Keeping on top of your customer payments doesn’t have to be so hard.
- Set shorter payment terms: While 30 days payment terms is the norm, there is no reason why you shouldn’t get paid within 14 or even 7 days for certain clients or jobs.
- Stage your payments: Don’t wait for the work to be completed to get paid. Ask for upfront deposit and invoice every 10-30% of work completed.
- Incentivize early payment or charge a fee of late payment: Offer a trade discount as a reward for customers if they pay before the due date and vice versa.
- Invoice promptly: Invoicing property occupants before you leave the site or shortly afterwards is a sure short way of getting paid instantly.
- Automate invoicing: Avoid facing excuses such as incorrect details, invoice sent to the wrong person or didn’t receive the invoice by automating the task and eliminating human error altogether. Also, always call to confirm receipt.
- Make paying easy: Offer customers multiple payment options including cash, mobile payments and bank transfers.
Wrapping up
So while you no longer hear customers tell you “My dog ate your invoice”, late payments are still very much a problem for tradies due to reasons that are hard to buy.
Make sure your business has legal protection with solid terms and try not to accept feeble excuses justifying payment delays
i4Tradies allows you to promptly invoice your customers before you leave the site, so they can pay you instantly while the completed job is still on top of their mind. Talk to us today and we would be more than happy to answer that burning question you have! Or, click below to claim your 2 week FREE trial.
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With our cutting-edge technology and in-depth knowledge of how the Field Service Management sector operates, the i4TGlobal Team loves to share industry insights to help streamline your business processes and generate new leads. We are driven by innovation and are passionate about delivering solutions that are transparent, compliant, efficient and safe for all stakeholders and across all touch points.
