There was a plea recently from a small plumbing business owner who wanted help collecting what is owed to her company. She indicated that people were refusing to pay for services rendered. To assist in her collection activities, she sends out a letter every thirty days when no payment has been received. Hiring an attorney is beyond her means at this time, but the number of overdue accounts is growing and she has to do something.
I’m going to assume that the work was done in a satisfactory manner and the customer is just having problems paying the bill. And the first question that came to my mind was why the amount due isn’t being collected at the time the service is complete. I know whenever I’ve had to call in a plumber (thankfully not often!), they required payment before they left my house.
So I think that’s where she needs to start. Change the payment practice to increase the likelihood of getting paid.
This can be as simple as advising the customer before the work is complete of the estimated fee that will be charged and getting confirmation to do the work. It also involves setting the expectation that the bill will be paid before the plumber leaves the premises. She didn’t indicate what type of payment she takes, but I would highly recommend getting a merchant account so she can take credit card payments.
If the plumber is walking away without payment, that’s where the collection problem begins. Don’t allow that to happen.