You know all too well how important it is to get paid. Without steady cash flow, you lack the funds to cover payroll, insurance, and other costs. But how to ensure that steady flow and get clients to pay promptly can be less obvious. To help ease your billing woes, we’ve assembled a list of tips from REMODELING articles and other sources that will help keep your accounts receivable as low as possible and your P&L statements looking healthy. Share your billing tips, too, to help us round out the list.
- Maintain even cash flow: It’s challenging to keep the money coming in and going out at the right speed, but paying suppliers early, dealing promptly with punch lists, and autopsying your jobs will help.
- Have the right attitude: Your attitude toward getting paid will affect how you get paid, so it's important that you approach clients with confidence. If you do good work and take care of your clients, you have every right to see money as well earned for your hard work.
- Bill as you're billed: One way to break up payments for a client is to set financial milestones and bill as you reach them.
- Give progress invoicing a try: Billing across financial or project milestones can be difficult, so try invoicing clients weekly based on work accomplished during that week.
- Systemize payment procedures: Keep customer payment expectations honest and in line with a system for sending invoices and collecting the money.
- Figure out what works for you: Every remodeling business is different, so be sure to set a payment collection system that works for your company.
- Know the rules: If you accept credit cards—or payment forms other than checks—make sure you know the rules and regulations regarding surcharges and fees.
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- Use the right wording: Being polite and using specific wording in your invoices will increase the likelihood that you are paid promptly.
- Keep it real: Prevent surprises by working with customers throughout the project to keep the job within the original budget or allowance. This process should start during the design phase of the project and continue until the end of the job.