Many electrical contracting businesses and others in the field service industry operate under the assumption that small debts are the norm. They think debt management is for big corporations and if they want to keep their customers happy, they need to deal with the inconvenience.
But the truth is that poor cash flow is one of the biggest business killers out there. Just read our interview with the #CashFlowPro himself, Ken “Mr. Biz” Wentworth learn more about field service profit and management.
So today we’ll try to dispel the myth that there’s nothing you can do about this. We’ve also enlisted the help of Anastasia Vinnik, a payment expert at SumUp, to tell us a few things about how instant payments can help you and why digital is the way to go if you want to start your debt management strategy.
Prevention is better than cure, or so the saying goes. But it’s especially true when trying to deal with debt management. Regardless of what system you’re using, your business strategy or your CRM, the first step all businesses should take is to screen their customers.
A field service company is no exception; a plumbing business should screen their customers just as much as an electrical company or an HVAC one.
This is especially important if you’re doing a lot of commercial work but applies to larger domestic jobs too. Get familiar with credit scores and financial statements before you sign a contract and you’ll save yourself a lot of trouble in the future.
2. Include a deferred payment clause in your Terms and Conditions.
A deferred payment, in debt management, refers to the practice of putting a block on a set amount of money on a customer’s card. You can do it both for domestic and commercial work. You’re probably familiar with it if you’ve ever shopped on Amazon or booked a hotel.
Many field service companies are apprehensive about it since they feel like it will scare customers away. But if it didn’t scare them away from booking holidays, then why would it now?
Taking deferred payments before starting work on a job is simply a good business practice. You always choose on a customer-by-customer basis if you don’t want to offend someone you’ve known for years and trust to pay on time although we’d still recommend doing this sparingly and for small jobs only.
If you want to reduce small debts (and large debts too!), this is a great way since you can defer the full amount on lower-priced jobs or a certain percentage on higher ones.
After the work is done and an invoice is raised, the technician can take payment on the spot but that’s only if you…
3. Instant payment gateways are the way of the future.
Is it even the future anymore? Do you remember the days when you went to a market, packed your organic groceries away and realized you didn’t have any cash on you?
The crushing disappointment as you had to tell the stallowner to keep your bags for a minute while you ran to the nearest ATM, knowing that he was putting everything back as soon as you were out of sight?
Except many stall-owners also hate losing business so they’ve started using instant payment devices, saving you all the trouble! According to SumUp payment expert, Anastasia Vinnik, this instantly transforms a negative customer experience into a positive one and goes further than you think in making customers loyal.
Not to mention the cash flow benefits your business gains from having instant money in the account rather than waiting for customers to mail cheques or for banks to approve credit card transactions. This way, you’ll overcome your debt management problems in no time.
That instant payment device? It was probably a SumUp Air Reader. Many businesses have chosen SumUp due to the benefits the device comes with, many of which are designed to work for small-to-medium companies looking to grow and offer an experience comparable to that of big name competitors.
Some of these are:
Simple pay-as-you-go pricing without fixed costs meaning that you don’t have to impose a minimum transaction value on your customers in order to offset charges
A 5-minute registration process with no long-term contract; simply order your device (arrives in 2-5 business days) and start offering instant payment!
Sleek, easy to use terminal that technicians can connect to their Commusoft phone app and carry in their pocket.
Fully PCI compliant meaning that your business doesn’t put customers’ details at risk and protects them from fraudulent activity.
These put any field service company in the big leagues when it comes to debt management!
4. Get accustomed to checking your analytics.
The great this about a payment solution is that since they’re fully digital, they come with analytics as well. Everything worth doing is worth measuring, after all.
When it comes to payments, things can easily get lost in the hassle, especially when your technicians are busy and running from one job site to another. Having a digital papertrail means that you always know who did what and if someone forgot to take payments after the work was done.
According to Anastasia Vinnik, SumUp offers a Dashboard where business managers can check the payment status, get an overview of total sales revenue and, of course, generate various payout reports based on their needs.
This means that you can run regular audits on how well your team is doing and how much return-on-investment your instant payment solution has generated. You’ll find that small debts are significantly reduced if you just make it easier for people to pay!
5. Always have the right invoice on hand.
An often overlooked benefit of having an instant payment device that integrates with your electrician software is that invoicing is not a hassle anymore. Many times, with cash or checks, your technicians forget to produce an invoice and it’s down to the office staff to manage and match the bill to the payment.
However, it’s very easy to lose track of paperwork and either leave the customer uninvoiced (which puts you in a risky legal position) or forget about the payment completely.
Many small debts come from the fact that field service companies don’t manage their invoices properly or are simply overwhelmed by the sheer volume if they’re not using a digital system.
With the way Commusoft integrates SumUp, this becomes a non-issue. The technician can’t take payment without associating an invoice beforehand. This way, you have a digital trail where every party is accounted for and your data stays organized.
If you’re going digital, you need to go all the way. Having an intelligent scheduling system, an online booking portal, and a sleek website will delight your customers but will also create an expectation that the experience will remain digital throughout.
You can’t have people hire you like it’s the 21st century and then pay like it’s still the 19th, right? You need to take card payments or accept the fact that you’re not providing the best experience you could. At the end of the day, what type of business do you want to run?
I'm here to bring you next-level strategies to the field service industry. When I'm not working on the best tips to grow your business, I'm on the lookout for sci-fi novels and cookie recipes.