The Impact of Slow Payments on Your Cash Flow
Most field service businesses don’t get paid immediately for their work.
Sometimes you’re able to collect payment in the field immediately after a job is complete. More often than not, however, field service companies invoice their clients and wait to be paid for their hard work.
Our friends at Fundbox pulled some eye-opening statistics about field service companies and how quickly businesses are paid. In their data, field service companies typically waited more than 25 days to be paid. Invoices issued by these companies were, on average, more than 9 days overdue before receiving payment.
Encourage quick payments for better cash flow
Jobber customers bill for over $100 million worth of service each month using Jobber. Slow payments can impact field service companies in a number of ways (see the bottom of this article for some statistics provided by Fundbox) so make sure you’re implementing tactics to encourage quick payment times.
Looking for a few easy-to-implement tactics to encourage quicker payments?
- Specify the due date on your invoices. It can be tempting to use a generic statement about due dates on all your invoices, something like, “Payment must be issued within 30 days upon receipt.” Don’t do this—it doesn’t seem to convince people of the importance of paying the invoice. Instead, include the specific due date for the specific invoice. If you do, you’re 8 times more likely to get paid on time.
- Include payment terms on your invoice. An important part of a professional invoice is a clear, polite statement about your payment period and what will happen if the customer doesn’t pay on time. If you put payment terms on your invoice, you’re 1.5 times more likely to get paid on time.
- Make it easy for your customers to pay. However your customers want to pay should work for you. So make sure you’re set up to handle multiple forms of payment including online payments. Businesses offering ePayments get paid 2x faster than cash, and nearly 3x faster than check!
The impact of slow payments
Fundbox surveyed small businesses in the U.S. to understand exactly how unpaid invoices affect small businesses. Here are some of their findings:
Jobber integrates with Fundbox, the fastest and easiest way to close cash flow gaps.
Fundbox has helped thousands of business owners overcome cash flow gaps by advancing payments for their outstanding invoices. By delivering funds as quickly as the next business day without interfering in your relationship with your clients, Fundbox enables you to do what you do best: run your business your way.