Wish Your Clients Paid Faster?
You build your positive HVAC contractor reputation by investing in quality tools, equipment, vehicles, and employees that support your operations, but despite your best efforts, your business’s financial health is largely determined by the amount of customers who pay for your work on time. Here are few simple tips that HVAC contractors with any size business can use to incentivize clients to pay faster.
Provide clear policies and procedures. Customers don’t expect to walk into a retail store and exit with a cart full of goods they’ll pay for later, because the retail industry standard is that a customer pays for merchandise before leaving the store. Unfortunately, the same standard isn’t consistently in place for home maintenance-related contractors, making it critical that you educate consumers on your company’s billing, pricing, and payment policies before the relationship begins.
When clients contact your business to arrange service, train your customer-facing employees to respectfully notify them of your policies, including the forms of payment accepted (such as cash, checks, debit and credit cards) and payment due dates, whether upon completion of the job, in installments, or within a certain period from the time the invoice is issued. Give the customer a written copy of the same policies when the estimate is approved; if you’ll implement late fees for past-due bills, provide those policies in writing, too.
Give them payment choices. If you only accept cash and checks, you may not realize the opportunity you’re losing. In one study by Community Merchants USA nearly 70 percent of consumers ages 18 to 34 and nearly 60 percent of those ages 35 to 44 said they will only do business with a company that accepts credit cards. Aside from customer preference, accepting credit card payments makes you less vulnerable to late payments due to a customer’s available finances (or lack thereof), and reduces the risk that a customer’s check isn’t backed by sufficient funds. Assuming the customer’s credit card payment transaction is authorized, the amount you’re owed (minus payment processor fees, which usually range from about 1 percent to 3 percent of the transaction amount) will be electronically deposited to your bank account by the payment processor (usually within 24 to 72 hours).
Accept mobile payments. If you have a smartphone or tablet and a bank account, you’re ready to select a mobile payment processor who can equip your business to process mobile payments. With such technology, customers can pay you by debit or credit card as soon as the job is complete. By simply plugging a small device (called a dongle) into the headphone jack of your mobile, you can swipe the customer’s card or manually enter the information through the payment processors mobile app. Transactions are authorized within seconds. Clients can choose to receive a receipt by text or email.
Equip your website for payment acceptance. Your business website can accept customers’ credit card payments online once a merchant account and secure payment gateway is implemented, and it doesn’t require that you have technical skills. Simply copy and paste a bit of HTML code that is provided by the payment gateway into the website.
Account setup can take place in as little as a few hours, and in some cases, mobile payment providers can also serve online sales. Because the payment gateway redirects customers to a secure hosted payment environment, your business isn’t tasked with handling sensitive card information (provided you select a payment gateway that is PCI compliant). Customers can choose to pay their invoice by credit card at their convenience, while reducing the time investment you and your staff must make collecting payments, reconciling billing, and depositing checks.
Try electronic invoicing. Sending hard copies of invoices by mail can add weeks to the invoice payment cycle. Replace hard copy invoices with electronic versions that you email to the customer directly for those who are amenable to the delivery format. Structure the invoice in a professional manner, clearly noting the total amount due, the specific due date and the forms of payment accepted. Direct customers to your website’s link where they can pay the invoice by debit or credit card, along with a phone number and/or email for a direct contact at your company who can resolve any invoice questions.
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