With late payments costing SMEs across the UK thousands of pounds to collect, and the total amount owed to small and medium sized enterprises across the country now totally £23.4 billion, it’s clear that this is a serious issue that needs to be addressed.
This is particularly true for commercial electrical contractors, as their time is particularly valuable as they’ve had to study for many years to earn the qualifications needed to fulfil their role. They might need to pay for additional support, equipment rental or parts, which will be paid out of their own pocket if the payment is late.
Late payments also affect the cashflow of a commercial electrical contracting business and can make it hard for it to continue working profitably.
As such, it’s important that commercial electrical contractors work to recoup the money they’re owed. Going to court is one option, but this can take a lot of time and incur considerable costs, so for those who are keen to avoid going down this route, here are some practical tips on how you can drive commercial clients to pay their invoices on time.
Provide Your Estimates Promptly
It’s important that you provide your clients with their estimates and other documents quickly and efficiently, so that they have no excuse not to do the same to you and pay their invoice on time. If you delay providing estimates, then they may use this as a justification for their late payment. One great way to create estimates quickly is to use Ensign, a software product which will quickly work out how long a job will take and how much it will cost, then create an accurate estimate of how much you should charge for it. All you need to do is visit ensignonline.co.uk to find out more about this innovative estimating software and how it can benefit you.
Speak Directly With The Accounts Department
Often, when working with businesses, particularly large organisations with multiple departments, it can be hard to communicate with the person who will be actually paying your invoice. As such, you should try to place your invoice directly into the hands of the person responsible for paying invoices and chase them directly. This will boost your chances of getting paid swiftly and ensure that your invoice doesn’t get lost on the way to the accounts department.
Highlight Your Qualifications
Commercial electrical contracting services are expensive because they require a lot of training, insight and qualifications, meaning that companies cannot bring this expertise in-house easily. If you ever find that your customers are late with making payment, or they query why your services are so costly, then take the time to explain the hard work and effort that went into earning the qualifications you had to earn to give them the service they received. You should also highlight the dangers that electricity poses and make it clear that your services are vital to the smooth running of your clients’ property and business. This should help them to understand the importance of working with a skilled and qualified contractor and drive them to pay their invoice without complaint.
Keep Chasing For Payment
When an invoice is long overdue, it can be easy to forget about it and not chase it, but this could lead your client to think that it’s not important. As such, you should make sure that you keep on top of your late payments and push for them to be paid. You can automate this function on most phones and email systems, allowing you to set of reminders and send scheduled messages. This will help to reinforce the message that the bill needs paying and, hopefully, get your invoice paid.
Offer Multiple Ways To Pay
In some instances, clients could be struggling to make payment for your services because they do not have the cash ready to pay or are slightly behind trend and only use cheques to make payment. They could also be too far ahead of the latest developments in payment technology and only make payment using innovative new solutions that you don’t currently use. As such, you should try to offer a variety of payment methods so that your clients will have no excuse not to pay and can easily find a way to pay their invoice that suits them.
Put An Interest Charge In Place For Severely Late Payments
Late payments can seriously disrupt your business and cause cashflow problems, so if you have payments that are really late, but you don’t want to go to court just yet, consider charging interest instead. This will incentivise clients to pay their bills. Send an updated invoice with the new charges and make it clear that the interest will continue to be charged the longer they avoid paying the bill. You could even offer to remove the interest charges from the invoice if it is paid immediately, to expedite the process and get your finances back on track.