There is one challenge that all service industry businesses, large or small share: the act of collecting payments from customers. Small business debt collection can often cripple an entrepreneur and their business.
Payments Made Easy
In today’s age of on-line payments, businesses make it so convenient for people to pay there really shouldn’t be a delay in receiving monies owed. There are interac payments, which take the money straight from your account with an email, PayPal, pre-authorized credit card payments, the Square (portable point of sale attached to your cell phone), as well as good old cash or cheques.
So it makes you wonder why people who retain service industry professionals simply don’t pay their bills. Would you go into Walmart and buy groceries and smile and wave and say “just bill me” and walk out the door? Or would you go and get a haircut and not pay for three months?
We Have Bills Too
Why do customers think it’s ok to not pay their bill when they have received a service from a small service based business? Service industry small business owners have bills too. We have bookkeepers to pay, insurance payments to make and advertisements to pay for in order to get new business . We rely on our monthly receivables in order to make ends meet. Most small businesses operate on a very tight budget and don’t have large lines of credit to carry them over for several months without cash flow from their receivables.
The number of hours a small business owner spends on the phone trying to collect outstanding debts takes away from time spent working for new clients. Let alone the hostility you experience when you try and collect the monies owed.
As a customer, when you reached out to that individual to design your new resume, place an ad in a newspaper, or do your taxes, you knew the fee or rate they would charge when you agreed to the service. You should be ready to pay the bill when you receive it.
If you need more time, or need to make arrangements, then talk to the owner of the business and set up arrangements and stick to them. Most of us have been in your shoes at one time or another and are willing to be flexible. But being flexible and being taken advantage of are two different things.
More than just the money
Unfortunately, human psychology comes into play and reminding people of their debts distresses them. For some clients, they may just pay their bills sporadically, or they may be experiencing financial difficulties and your bill gets moved to the back burner after buying food and paying their hydro bill.
The flipside of that is the clients who see you at the grocery store, or networking events and pretend that they don’t owe you any money or address it by saying “I’ve been so busy – I’ll send you some money next week” – but you know they won’t.
Fool me once, shame on you – Fool me twice….won’t happen! I guarantee that the next time you need a service, my small service industry business owners and I will be asking for payment in advance.