Customers are AWFUL people

[busowner987]

recently having a spate of people not paying on time.

Our customers pay upfront deposit and then balance on completion.

Lately phoning when job is just finished and we ask for payment. You would think that we had just called them a cu**

I'm looking at introducing a new T&C

'if payment is outstanding after 48 hours we will attempt to charge the card that was used for deposit By signing overleaf you agree to this term'

 

[Darren_Ssc]

recently having a spate of people not paying on time.

Our customers pay upfront deposit and then balance on completion.

Lately phoning when job is just finished and we ask for payment. You would think that we had just called them a cu**

I'm looking at introducing a new T&C

'if payment is outstanding after 48 hours we will attempt to charge the card that was used for deposit By signing overleaf you agree to this term'

Depends on the context?

 

[busowner987]

Its quite simple we ask for payment on completion. If I go to the pub or cinema I pay upfront.

when we finish work in your home we want payment before we leave.

Bloody cheeky gits!

 

[DavidWH]

What's the reason you can't take full payment before hand?

Perhaps you're attracting the wrong customer to start with?

 

[busowner987]

we do work in peoples homes

upfront deposit
finish job for balance payment

 

[DavidWH]

So what's preventing you taking full payment before hand?

 

[fisicx]

Or milestone payments.

Deposit > Payment after prep > Payment after installation > Final payment on completion.

 

[Darren_Ssc]

we do work in peoples homes

upfront deposit
finish job for balance payment

You need to make some provision for defects and the fact that your customers may not think you've done such a good job as you think you have.

Demanding payment on completion suggests a bit of a fly by night set up.

You could use a provision for reporting defects as a nudge towards final payment, for example.

 

[busowner987]

You are suggesting that when I exit Tesco I should go home cook the beef and if I have a good meal phone up the store to pay?

Thats bonkers!

 

[Darren_Ssc]

You are suggesting that when I exit Tesco I should go home cook the beef and if I have a good meal phone up the store to pay?

Thats bonkers!

You're not Tesco are you?

 

[Clinton]

I think you guys are giving the OP an unnecessarily hard time. It is quite normal in many industries / services for part payment to be made in advance and the rest on job completion.

 

[busowner987]

Im not the local corner shop either.

All the big boys in this game take payment on completion. Installer finishes the work and he asks you if your happy. you say yes then he wants payment.

If you say no - he sorts out the issue then an hour later he asks you for payment.

We would be running up and down the country if we gave every body a few days to think about paying

 

[Darren_Ssc]

Im not the local corner shop either.

All the big boys in this game take payment on completion. Installer finishes the work and he asks you if your happy. you say yes then he wants payment.

Do that then

 

[DavidWH]

In which case:

Perhaps you're attracting the wrong customer to start with?

We take a minimum 50% although the closer to 100% the better.

 

[Karimbo]

There are many reasons why you dont take payment upfront.

Working at people's home, decorating, building etc. It's normal to pay on completion or if it's a big project in milestones and/or deposit.

Deposit is typically used to pay for all materials and final balance to collect the labour charge.

To everyone advising OP to take payment upfront. Would you pay upfront to some builder you rang up from google to come in and give you an estimate on your job? No I wouldn't either. You have to inspect the work before you pay the builders, make sure the work has been done to a satisfactory standard.

If I paid a builder in advance, I know they'd do a crap job. If I retain the money until end, they will make sure the job is done properly so that I don't retain money for the poor quality work.

I have three solutions for you.

1) expectation management, clearly define the work involved what you will carry out to the T, the level of finish for them to expect and highlight any probable issues that may increase the cost for them. E.g. damp underfloor on tiling job which might take additional time & mats to remidy. This way the customer will know what to expect and what they are going to be parting with. The issue as a buyer I have is when I leave the car to a mechanic to do work on X and they agree an estimate with me. I come back and there's more "needed work" added on or it goes over estimate.

2) Before you ask for payment, talk them through everything you've done. Allow them a chance to inspect all your work and make sure they're happy with the end product before you ask for payment.

2) For medium size jobs take payment in milestones.

3) Just accept the fact that people dont like parting with their cash, it brings up bad feelings. Even if you've done a steller job, people dont like the feeling of handing over cash. Just grow a thick skin and accept that.

I would advise against just billing them automatically within 48 hours. You need to notify customers clearly in advance before you charge their card. Customers have a right to pay after inspection of work. If they are not happy with the finish they have a right to challenge the bill. If you just charge their card without clearly informing them. They will try to do a chargeback, their bank will contact your merchant to freeze funds etc. It will leave you in bad standing with your merchant.

 

[intheTRADE]

Depending on the type of work and value of the work you are carrying out you have a few options.

Firstly, and with all due respect, stop comparing the business model you have to Tesco. Or any other retail business. It's totally different and having that comparable in your head will just deviate you away from solutions you have to be paid.

I second what @Karimbo advises and do not use automatic billing after 48 hours. You will lose more work than you win with wording like that.

My suggestion would be using a 3rd party escrow account whereby which the customer would pay for the full value of the job (or remainder value after you have taken a deposit) and this would be held until the job is complete and the customer confirms they are happy. Funds are then released to you. There are escrow services out there that can be set-up for a couple of quid per job and cover up to £10,000. A lot of them come with free agreements and contracts for you and your customer - Peace of mind for both your customer and yourself

 

[bodgitt&scarperLTD]

Polite reminder, friendly phone call. Usually does the trick. However...

Tried that three times with one recently, £10 for a letter before action from Thomas Higgins and I was paid three days later.

 

[Clinton]

I deal with many boutique investment banks, M&A advisers and corporate finance houses - people who sell businesses. Their fee model is very much a small retainer of about £30K to £50K at the start followed by a success fee when the business is actually sold.

The success fee is quite large. Grant Thornton need to see a clear route to £300K before they'll take a business on. Zaoui, Houlihan Lokey, Lincoln International etc need to see £5m! The threshold varies but most need to see at least £200K if they are to not lose money on the deal.

Think getting £3,500 at the end of the job is difficult?! Try asking for £350,000.

The perennial problem with these intermediaries is that when they've sold a client's business and the client needs to cough up £300K suddenly they'll find all kinds of objections and complaints and feet shuffling and prevarication.

Even the most agreeable, friendly and reasonable clients get to that point and suddenly want to renegotiate fees or ask for a discount on some pretext or the other.

I have advised these investment banks and other intermediaries on how to minimise this problem. I'll summarise my advice here:

1. The engagement letter may have made clear that you'll get 2.5% of the headline price (including all deferred payment, earn outs blah blah). But people don't read contracts! After they've signed it, make this point in clear English in an email dedicated to spelling out to them that they'll have to pay you 2.5% (or whatever) of the price ON THE DAY OF THE TRANSACTION (even if they are only going to get paid later). Get them to confirm by reply.

2. Manage expectations through the transaction. Remind them along the way that you're entitled to £300K+ at the end. If they ever praise you for something, bring up again that you're worth the £300K you're going to be charging them. Keep mentioning the figure.

3. Consider modifying your fee structure to include milestone payments at the research stage, CIM, Heads, VDR setup etc. Installments reduce the pain.

4. Right at the start take an irrevocable mandate from the client instructing their solicitor to pay you £x out of the proceeds of the sale on the day of completion.

etc etc. (If you want points 5 - 10, I'll have to invoice you! but hopefully the above will give you some tips)

 

[busowner987]

Lol thanks for the latest posts guy good stuff.

I just had one customer on the phone, been chasing for the last week! £2000 and she was going on about this and about that.

I could see where the conversion was heading - money off....... I asked her what she was suggesting and she said a tenner.

A fu**ing tenner. Bloody hell.

Then her card declined

2 card payments later and all dusted.

We actually only have 1 customer that made payment really difficult and we issued small claims. Right at the final hurdle they offered which was not quite what we had all agreed on the contract. I did accept to move onto another day.

The court system though is a joke. Would be around 8 months before it actually got to court.

 

[Chris Ashdown]

Get a card machine and after walking the client around the finished work, ask for payment there and then get out your card reader

When you accept a job make sure they understand when payment must be made

Nothing stopping you telling the customer we expect to be finished tomorrow, I presume you can pay the final bill then

 

[busowner987]

I did think of that but I sit in an office many miles away. The installers are the ones out there in the war zone and we don't actually share with them the £££ side of the jobs. It tends to make them get green eyes.

 

[JEREMY HAWKE]

We take payment on booking unless you are the NHS ,mod ,Council or one of the waterboards

I decided to do this after the last resession /crunch
The fact of the matter is that I lose a bit of business by not offering credit but nearly all my competitors from 15 years ago have gone. Mostly due to bad debt
I just want an easy life and no factoring people (you know who you are @Ian J )

 

[Ian J]

I just want an easy life and no factoring people (you know who you are @Ian J )

I have a courier success story for you. 40 years ago I met a young lad wearing full motor bike regalia who had a motor bike courier business in London turning over £100,000 pa

He had big ideas of setting up a national courier company whereby he would operate a hub and franchise out all of the local courier businesses. This was something that I don't think had been done before but we liked the way the chap talked and the research that he had done so we decided to back him and offered him a factoring facility.

His name was Richard Gabriel and his company was called Interlink Couriers

 

[busowner987]

thats a lovely story! Now he is a very rich man I presume and good luck to him!

 

[JEREMY HAWKE]

I have a courier success story for you. 40 years ago I met a young lad wearing full motor bike regalia who had a motor bike courier business in London turning over £100,000 pa

He had big ideas of setting up a national courier company whereby he would operate a hub and franchise out all of the local courier businesses. This was something that I don't think had been done before but we liked the way the chap talked and the research that he had done so we decided to back him and offered him a factoring facility.

His name was Richard Gabriel and his company was called Interlink Couriers

OK mate you win this one we all know him !
I tried all that nonsense though I just really want to sit on the harbour of Chania eating a fish salad now

 

[Ian J]

I just really want to sit on the harbour of Chania eating a fish salad now

I was going to follow your advice and go to Chania next summer but I chickened out and booked a villa in Spain instead. The decider was the flights from Birmingham or East Midlands meaning that I didn't have to schlep all the way down to Gatwick.

Having booked the flights and paid a hefty deposit on the villa I'm regretting it already

 

[Craig3141]

There are many reasons why you dont take payment upfront.

Working at people's home, decorating, building etc. It's normal to pay on completion or if it's a big project in milestones and/or deposit.

Deposit is typically used to pay for all materials and final balance to collect the labour charge.

To everyone advising OP to take payment upfront. Would you pay upfront to some builder you rang up from google to come in and give you an estimate on your job?

I'd be cool with it if they would take payment into escrow.

 

[MBE2017]

I would echo the advice of setting up stage payments, better to chasing the last 10/20% of the total than all of it. If your client is averse to this, then you will almost certainly be struggling to collect the full amount.