Customers paying late

[plumber_UK]

I've been a plumber / gas engineer around 12 years now and still cant manage to get customers to pay on time. I've tried everything, telling customers how much the job is before I turn up, invoicing while on the job so they have no excuse to wait for the invoice. Adding "payment on completion" to invoices, reducing due dates. Automatic reminders for late payments and nothing works. Why do people have work done if they cant afford it ?

Its about time they made shows about cowboy customers.

I'm sure the bulk of plumbers and gas fitters on here have had their fair share of late paying customers ?

We are all made to look bad on these shows but they never show it from the tradesmen's side.

Being Christmas id especially like to get paid on time but it seems 70% of my customers have chosen to use my money to enjoy themselves.

Is their anyone else that shares similar views ?

Rant over

 

[ShaunCorbs]

whats your terms?

 

[plumber_UK]

It was 30 days, then 7 days, now payment on completion although i do leave it a week or so before sending a reminders.

 

[ShaunCorbs]

do they just ignore the letters ? have you tried phoning them to see wheres payment

 

[plumber_UK]

oh mate, I try everything
I have a system set up where a day late they get the first reminder then a week later 2nd reminder and another week later final reminder. If i dont here anything i follow up with a phone call. This month though a few people have just plain ignored emails and texts.

Obviously I do get paid eventually but its the time and effort it takes.
Cash flow is king, I cant keep financing these people.

You cant walk into tesco and decide that your going to pay next week then a week later post a cheque out.

 

[plumber_UK]

how are your customers ?

 

[ShaunCorbs]

maybe state on the bottom of the late reminders that the outstanding balance will be passed on to a 3rd party if you do not pay etc

my terms

14 days for small amounts about 10k
30 days for big amounts anything upto 1 mil

 

[plumber_UK]

I have. i'm register with a debt recovery agent whos name is in the terms but i think most people ontt read terms or aren't botherd

 

[ShaunCorbs]

I have. i'm register with a debt recovery agent whos name is in the terms but i think most people ontt read terms or aren't botherd

maybe worth putting in bold on the late invoice, and maybe if they ignore toss some work to him, i know you dont like to but might be worth it like you said you dont ask for credit/extensions from tesco etc

 

[plumber_UK]

Yes
That is possibly the only thing I haven't done

 

[ShaunCorbs]

Yes
That is possibly the only thing I haven't done

worth a try on a couple if they ignore it in bold

 

[townfanjon]

Plumber uk , sorry I dont know your name ... Are you generally stacked out with work ? , Surely all your customers cant be bad payers , can they ?

 

[plumber_UK]

Yes fairly busy, not all my customers are like it. But id say more than 50% of them pay late.

When i finish a job most customers ask " are you going to send an invoice and ill send payment". That's their excuse to get me out of the door and then pay at their leisure but i always invoice whilst on site but they dont pay while im there.

 

[townfanjon]

This is a hard one especially if you employ somebody.
I will probably get slatted for an opinion like this ......But I would simply temporarily sack the bad payers , dont tell them . When they ring up again say you are not interested as you only want good prompt payers, call their bluff , if they use you again they will probably pay promptly , if they don't, sack them. We all work hard enough the last thing we want is crap payers .

 

[plumber_UK]

This is a hard one especially if you employ somebody.
I will probably get slatted for an opinion like this ......But I would simply temporarily sack the bad payers , dont tell them . When they ring up again say you are not interested as you only want good prompt payers, call their bluff , if they use you again they will probably pay promptly , if they don't, sack them. We all work hard enough the last thing we want is crap payers .

I 100% agree
I had around 10 guys working for me a couple of years back and the late payers nearly sent me under. With all the stress i decided to downsize. Its just me now but i do need another plumber but things like this just put me off taking anyone on.

 

[hammers4spanner]

The late pay customers i get are off flaming checkatrade every customer on that site has been a pain one way or another

 

[plumber_UK]

Has anyone tried taking payments by card ?

 

[ShaunCorbs]

The late pay customers i get are off flaming checkatrade every customer on that site has been a pain one way or another

thats the funs of them type of sites hammers

 

[Best]

Truth is, once you have their job finished they can decide to late pay you and there's nothing you can do about it, despite if you asked verbally or had it in typed lettering the size of an A4 page asking for immediate payment.
Different thing entirely if you walk out through Tesco doors with a trolley of goods while promising to pay next week, - that's theft!
People promising to pay you for all your supplied materials and time and then not bothering to pay for a few weeks, - that's just a debt owed to you. Sadly that's the law.
What can you do but wait on your money? Taking it to small claims will often just result in slower payment, and that's if you win.
Electricity bill, Gas bill, Mortgage /Rent bill, Car HP, Wife's and kids Christmas presents, Christmas booze are all more important than the plumbers one off bill. He can wait to end of January

 

[hammers4spanner]

Truth is, once you have their job finished they can decide to late pay you and there's nothing you can do about it, despite if you asked verbally or had it in typed lettering the size of an A4 page asking for immediate payment.
Different thing entirely if you walk out through Tesco doors with a trolley of goods while promising to pay next week, - that's theft!
People promising to pay you for all your supplied materials and time and then not bothering to pay for a few weeks, - that's just a debt owed to you. Sadly that's the law.
What can you do but wait on your money? Taking it to small claims will often just result in slower payment, and that's if you win.
Electricity bill, Gas bill, Morgage/Rent bill, Car HP, Wife's and kids Christmas presents, Christmas booze are all more important than the plumbers one off bill

This is very true ,

The law is a sham when it comes small business and late payments .Got a good bud of mine who is a lawyer deals with this all the time basically said if someone don't wanna pay they won't. Most will pay after threat of court but some won't give a monkeys and still won't pay there after

 

[plumber_UK]

Truth is, once you have their job finished they can decide to late pay you and there's nothing you can do about it, despite if you asked verbally or had it in typed lettering the size of an A4 page asking for immediate payment.
Different thing entirely if you walk out through Tesco doors with a trolley of goods while promising to pay next week, - that's theft!
People promising to pay you for all your supplied materials and time and then not bothering to pay for a few weeks, - that's just a debt owed to you. Sadly that's the law.
What can you do but wait on your money? Taking it to small claims will often just result in slower payment, and that's if you win.
Electricity bill, Gas bill, Mortgage /Rent bill, Car HP, Wife's and kids Christmas presents, Christmas booze are all more important than the plumbers one off bill. He can wait to end of January

Yes it is the law but maybe the law needs to change. id call it theft when someone has got materials which i purchased and they have asked for in their houses and they have not paid for it. It seems all the big companies are covered but nothing for us legitimate tradesmen.

 

[Best]

I would also call it theft. Even if a customer does pay the full bill eventually, they have taken the cost of that invoice as a free loan from you.
The law has no teeth, except where you have a customer who has a good respectable job and stands to be embarrassed and possibly the money taken from their salary by the court if it has to.
Best to always cry poverty to each customer. Also insist on stage payments on bigger jobs. No reason not to be paid for materials and wage each week.
I think you have to accept there will always be some customers who will pay a little late and you just have to allow this.

 

[Masood]

Yes it is the law but maybe the law needs to change. id call it theft when someone has got materials which i purchased and they have asked for in their houses and they have not paid for it. It seems all the big companies are covered but nothing for us legitimate tradesmen.

On anything but the smallest jobs, I always get a deposit to cover all materials and most of the labour.

Clearly stated on the quote - deposit due one week ahead of start date to allow materials to be ordered. No deposit, no start.

Still get slow payers but at least my bills are covered.

 

[plumber_UK]

On anything but the smallest jobs, I always get a deposit to cover all materials and most of the labour.

Clearly stated on the quote - deposit due one week ahead of start date to allow materials to be ordered. No deposit, no start.

Still get slow payers but at least my bills are covered.

Good idea

My problem is i have directed my business to emergency repairs so a bulk of my jobs are under £100, Also I'm unable to get deposits for emergency call outs.

 

[Best]

Good idea

My problem is i have directed my business to emergency repairs so a bulk of my jobs are under £100, Also I'm unable to get deposits for emergency call outs.

A lot of my recent jobs are same - often under £100.
I find it is an advantage being small amounts because you have usually small outlay (if any) in materials and really that is the money you are out of pocket.

 

[dave1]

Have you thought about getting one of those card machines so you can accept payment on the spot?

 

[Masood]

Good idea

My problem is i have directed my business to emergency repairs so a bulk of my jobs are under £100, Also I'm unable to get deposits for emergency call outs.

Get a card machine mate. Seriously, I used to do so much emergency callout work when I first went SE. Card machine meant I got paid before I left. No excuses about no cash, no messing about with cheques, and people are really impressed at how professional it looks.

 

[JCSPLUMBING]

I just got a payleven card machine and also I don't leave until I'm paid. It can get pretty awkward hanging about but if you stand your ground and tell them you require payment they usually fetch it from somewhere. I've even waited in the van while they head to the bank/cash machine. It's not nice but it's the only way sometimes.

 

[plumber_UK]

Get a card machine mate. Seriously, I used to do so much emergency callout work when I first went SE. Card machine meant I got paid before I left. No excuses about no cash, no messing about with cheques, and people are really impressed at how professional it looks.

Yes I think that's my only choice.

Which one did you use?

 

[dave1]

I just got a payleven card machine and also I don't leave until I'm paid. It can get pretty awkward hanging about but if you stand your ground and tell them you require payment they usually fetch it from somewhere. I've even waited in the van while they head to the bank/cash machine. It's not nice but it's the only way sometimes.

If people choose to pay by card do you add the % fee for using it to the bill or just lose it yourself?

 

[plumber_UK]

I just got a payleven card machine and also I don't leave until I'm paid. It can get pretty awkward hanging about but if you stand your ground and tell them you require payment they usually fetch it from somewhere. I've even waited in the van while they head to the bank/cash machine. It's not nice but it's the only way sometimes.

Ha
Your right, stood there waiting for them to find the cash is so awkward, maybe i give in too easily.

I think things need to change in the New year

 

[Ray Stafford]

If you have a reasonable amount of work, can I suggest asking for a 10% (or even 15%) booking fee on the acceptance of a quote, then 40% (or materials value) when materials are on site, leaving just the balance for completion?

Obviously it means that you already have half the money, but more importantly it helps identify those customers who are likely to be poor payers (or cancel at the last minute).

If someone is not happy paying 10% up front, look them straight in the eye and ask why you should trust them for 100% if they won't trust you for 10%.

 

[Ray Stafford]

Another possibility is to give them the invoice on the second to last day of the job, reminding them that full payment will be due tomorrow. It might also be worth investing in those service interval programmers, and set it for +7 days before it shuts the heating off. When paid, plug an ordinary unit into the backplate.

 

[Masood]

Yes I think that's my only choice.

Which one did you use?

I had a Streamline / Cardsave one until recently. £25/month plus a small percentage. I've just got rid of that and gone for a Worldpay Zinc one. No monthly fee but 2.75% on all transactions. I pass on part of the transaction fee and swallow part of it as the price of convenience.

 

[Ray Stafford]

I pass on part of the transaction fee and swallow part of it as the price of convenience.

Which is what all businesses do.

Chasing overdue invoices isn't free. If you have to do it yourself, then you should consider that it costs whatever your hourly rate is.

On a job worth £2000, 2.75% is £55. If it saves you one hour of time chasing payment, you are probably breaking even. If it saves you 2 hrs, you should be ahead of the game. If it saves you going to court, or (worse still) taking a bad debt, then you could pay for a whole years worth of charges in one transaction.