If there's one thing that aggravates me more than the customer that acts like a jerk, it's the customer that takes forever to pay for services rendered. These are usually the types that have never owned their own business, and are quite often also the type that expect you to bend over backwards to accommodate special requests or to perform extra services for free while on the job site. Funny that they ask so much of you but think nothing of taking a month to pay. In their world they're just happy that that they needled you for every bit of free labor they could get and don't give a damn about your cash flow.
As in life, one of the keys to running a successful business is to anticipate and head off problems before they arise. I've gotten in the habit of explaining our payment expectations when homeowners call to schedule the work at their home, and it's a ritual that has been pretty effective in avoiding payment problems down the road. No matter if you're trying to become a general contractor or a grout cleaner, tell them up front that payment is expected immediately upon completion of the job, and that they should make their check payable to "so and so contracting, LLC". If they want to pay with a credit card they should have it ready when the job is done. Setting the stage in this manner will alert the customer to the fact that you take immediate payment seriously, and in most cases they will follow directions to the "t". There's a way to do this without sounding like an a-hole, and if you can't figure it out on your own then ask someone for help or get someone else to do the scheduling who has better phone etiquette.
No matter how well you prepare, however, there will inevitably be customers that "forgot their checkbook" or "can't find their credit card" or some similar nonsense. If it's obvious that they absolutely will not or cannot pay on the spot, act a little shocked, then hand them a self-addressed stamped envelope (you should have several prepared in your work binder for this kind of situation) along with the invoice, and make sure to write "Your prompt payment is appreciated" on the bill. These few simple steps will go a long way in demonstrating to them how serious you are about collecting the money ASAP.
If a week has gone by and you STILL haven't received payment, skip the usual thank you letter and instead send out a demand for payment letter. Make it friendly in tone, but be clear that your company relies heavily on weekly cash flow to keep up with your financial obligations and that their immediate payment would be very much appreciated. End it with another expression of gratitude for the opportunity to perform your service at their home, and don't forget to include another SASE just to help grease the skids a bit.
If two weeks have gone by without sign of payment, you need to make a phone call and politely ask what's going on. If that doesn't work then, of course, other options come into play which aren't very pleasant but which are occasionally necessary, and include lawyers, debt collectors, and liens. The bottom line is that you don't want things to digress to this point, so do your best to set expectations before work has even begun, and you can help to limit the number of deadbeat customers that you'll eventually have to deal with.
I'm Scott and this is my blog. Welcome, fellow contractors.
