If you are in field service, you probably know how hard it can be to deal with customers who cannot pay on time. When you deliver a service, you expect a customer to pay on time so you can continue running your business without any issues. So, you send your invoice and follow up to ensure the customer will fulfill the payments. Some do, but others are reluctant and raise issues to avoid or delay paying. Once you have issues with sorting out invoices, it becomes a challenge to manage your business. You have to find other means to pay your workers, buy equipment and parts and handle other business processes that require money. It is crucial to collect outstanding invoices to ensure your HVAC business is running without interruptions. Here are five practical approaches you can take.
- Invest in Field Service Management Software
Your payments may delay if you delay sending invoices or if the invoice you sent hand issues. You and your customer must go over everything several times to resolve the issue. The best way to avoid delayed invoices or errors is by using field service management software, specifically HVAC invoicing software. The software stores customer data from the moment they hire you up to the end of the project. It helps record everything involved in the project, including hours worked, labor, and parts purchased. Therefore, the software will automatically generate your invoices, allowing you to send accurate and complete invoices on time.
- Ask for Down Payments or Part-Payments
A great approach to prompting payments is by asking for advance payments. For example, you can ask for a down payment before the services start or part payments depending on the agreements. If you are taking on a long project, you can go for part-payments, where the client pays after reaching a specific milestone. You can also go for monthly or time-based payments. Be punctual to halt services if the agreement is not met.
- Get Legal Contracts
You are at significant risk if you have a habit of starting a business with a customer without a legal contract. It is advisable to have a contract that obliges everyone involved to meet their end. When creating the contract, ensure you have an invoice clause that summarizes the final payment and cost of the service. Include fees for late payment and how to dispute conflicts if they arise during the contract.
- Follow Up Proactively
Even when you put effort into getting customers to pay, some may still not pay for various reasons. So, consider automating reminders and contacting them about outstanding payments through calls, texts, and emails. Nonetheless, maintain rapport even when customers delay paying. Communicate effectively and provide several payment options.
- Hire Debt Collection Agents
If all the above methods have failed and the customer is no longer responding, you will still need to find a way to collect your money. At this point, you can hire a debt collection agency to collect your outstanding payments. You will need to pay a small fee, and the agency will pursue the clients.
To Wrap It Up!
These are proactive approaches you can take to handle outstanding invoices. However, the best one is using HVAC invoicing software to generate accurate invoices and send them on time.