Here are three easy steps that will help ensure you get what is owed to you after completing a job.
If you're just starting out on your own in the sewer and drain cleaning industry, finding work in the first place can be hard enough. Then, devoting the resources to actually performing the work is often no easy task. After all of that, you expect to get paid for your work. Often, though, this isn’t the case. You may actually spend more time and effort getting paid than you did in getting the work in the first place and then performing it.
Here are three steps you can take to increase your chances of getting paid in full, and in a timely manner.
1. Talk billing up front
The best approach, according to Carol Frischer, is to create language related to payment terms up front. Frischer is the billing/collections manager for Holthouse Carlin & Van Trigt, an accounting firm based on West Los Angeles, and author of the book Collections Made Easy: Fast, Efficient, Proven Techniques to Get Cash from Your Customers.
“The first step to getting paid is to arrange payment terms before you even start the job,” she says. “Make sure the contract spells out payment terms.”
One possible option is to have the contract specify that you get paid half up front and half at the end of the job. “If you wait until the end of the project to seek full payment, you can be out a lot of money,” she says. This option should also stipulate that you receive the second half of payment as soon as the job is completed, while you are still there — not a “check in the mail.”
Another option, especially if it is going to be a long-term job, is to have the contract specify that you receive weekly, or at least biweekly, payments. “You should then submit your invoice each week, and then get paid each week, or at least every two weeks,” says Frischer. “That way, if you’re not paid at the end of a specific week, it is a red flag, but you’re only out one or two weeks, not the whole job.”
If you receive an excuse, instead of a check, at the end of the week, and the customer promises payment the following Monday morning, it is OK to wait until Monday, according to Frischer. If the check is still not available on Monday, you may want to be a little bit flexible. “It may depend on the circumstances and the reason they give you for not being able to pay you,” she says. “In some cases, you might give them a few more days. But if you’re still not getting paid, then you don’t go back to work. If you do continue to work without getting paid, your risk of not getting paid at all increases.”
2. Pick up the telephone
If you end up in work arrangements where contracts do not include terms that involve payments before and during the work, and you end up sending invoices, the telephone is the very best tool for beginning the collection process that results from invoices not being paid in a timely manner, according to Frischer.
She offers some “phone tips”:
- Check your files before you make the first call, and make sure that you have all of the information on the account in detail, including the names of relevant people in the debtor company, the specific person who “holds the purse strings” (who is the person you want to talk to), details on the work you have done (when and where, etc.), what was agreed to in terms of payment, when payment was expected, and so on. You should not have to spend time looking for information once you are talking to the debtor.
- Determine when you will place your call. According to Frischer, one of the best times to call is about 30 minutes after the debtor starts his or her day. So, if he or she begins work at 8, call at 8:30. This gives the person time to settle in, but is also soon enough that the person probably isn’t wrapped up with a lot of other work yet.
- Start out with a positive attitude. Don’t blame the debtor, put pressure on them, or say anything in an accusing manner. For example, first ask if they received the invoice. If not, then email or fax it immediately. If they have received the invoice, then ask if there is any problem or reason as to why they haven’t paid. If so, this is the starting point for resolving the issue.
If you end up having to leave a message on their voicemail (since some business people never answer their phones “live”), state your business succinctly and professionally and ask that they return your call as soon as possible.
Don’t call more than once a day. Doing so not only annoys the debtor, but can be construed as harassment.
Keep a log of your phone calls to each debtor: when you called, to whom you spoke, details of the conversations, promises made, etc., and refer to this information if and when you need to call again.
3. Putting it on paper
Letters can also be effective in generating collections. As with the phone call, provide all of the written information in a nonthreatening manner, but keep the letter as short and to the point as possible. “Speak in a language that anyone can understand,” says Frischer. “Read your letter out loud. It should be a conversation in writing.”
Frischer also recommends staying away from the standard collections letter sealed in the standard company envelope, which is something that debtors often throw in the trash without even opening. Be creative. For example, print the letter on brightly-colored stationary to get the debtor’s attention. “Multicolored letters usually signify announcements, invitations to parties, letters from friends, etc.,” she says.
Then, write the person’s name on a blank envelope in colored pen. “A plain envelope with handwriting in a colored pen is certain to catch the attention of the recipient and will guarantee that he or she does not discard your letter unopened,” she says.
These creative approaches are much more likely to at least make sure debtors open your collections letters and are aware of your efforts to collect.