What To Do When Your Customer Won’t Pay an Invoice
Running a field service business requires owners to spend considerable time on job sites. You have little room for time management errors, which means you need to create a strategy for customers that won’t pay invoices.
Customers fail to pay invoices for a number of reasons and it’s your job as a business owner to stay on top of overdue payments.
Take Control of The Payment Process
Field service business owners walk a fine customer service line when it comes to chasing down customers that won’t pay an invoice. The best strategy for augmenting your cash flow involves a proactive approach to getting customers to pay their invoices on time.
Legally Binding Contract
A handshake used to be enough to cement a business relationship between customers and businesses. Times have changed, which means you need to create a legally binding contract signed by every customer for every field service job.
Here’s what to include in a contract:
- Project summary
- Late payment fee
- Dispute resolution
- Project deadline
Request a Deposit
The best way to get paid for a project requires you to set deposit terms within the project contract. For most projects, a 50% deposit represents a realistic deposit requirement.
When Proactive Doesn't Cut It
Sometimes, being proactive isn’t enough to receive payment for a job well done. If this happens to your field service business, you have to follow a few tips that ensure you maintain a healthy cash flow.
Be polite when handling customer service issues, such as late payments.
You must contact a customer immediately following a payment deadline. The longer you wait, the less likely the customer sends a payment.
Make sure you contact the person or department responsible for account payables.
Finally, improve your cash flow by following up an initial late payment contact with additional reminders.
When It's Time for Legal Action
Every field service business owner has to deal with delinquent customers. That’s just one of the facts of operating your own business. This is when the time for worrying about customer service fades into the background and the time has arrived to take legal action.
Send a notarized letter informing a customer of the breach in contract, including language that you have stopped providing service. Never promise legal action that you can’t deliver.
Hire an attorney that specializes in contractual law and be prepared to commence legal proceedings against a customer that has gone well beyond the deadline of a late payment.
Another point to remember is working with repeat customers reduces the likelihood of you not receiving payment upon a project’s completion. Repeat business ensures your cash flow remains steady and you eliminate the hassle of chasing down hard-earned money.
Providing superior customer service includes handling delinquent customer payments the right way.