When you first start out, you will want to set up some basic payment terms. In doing this, you are creating a set of standards and procedures that will allow your business to run efficiently and be fiscally healthy. In addition to being clear and concise with your clients about your expectations for payments, you're also setting yourself up to be able to create a budget. If you are just getting started with hiring employees or independent contractors, then you will be able to structure your payroll schedule to coincide with your payment schedule.
The most common payment terms in the residential cleaning industry is to have payment due upon completion of service….and the easiest and most convenient way for you and your customers to take care of that payment is to accept debit or credit card payments.
Stripe: It can literally be set up in 30 seconds. If you choose to create an online ordering system, it can integrate with your website using webhooks, or an API.
You can also see a quick video demo of how to set up stripe and integrate it with Fieldd Service Software here: Stripe Set-Up Video.
Square is also great option if you need the ability to swipe a clients' card on-site. We are sticklers for collecting a credit card during a sale, so swiping is actually a pretty rare occurrence for us!
Of course, you can still accept cash and checks for you services. They do have the advantage of having no fees involved, but you also run the risk of a client forgetting to leave payment…cough. cough. Then you'll end up chasing them down for weeks before you actually get paid. U-hum!
For clients such as property managers, real estate agents or commercial accounts, the most common terms will be Net 15, Net 30 or Net 45. These are the clients that you will be mailing invoices to, and then will reconcile based on the terms that you have provided. But, I still recommend always having a credit card on file for these clients so that you can hold them accountable!
Once upon a time in a world not much different that the one we live in today, we extended our payment terms to a seemingly loyal client. Our head tech at the time was convinced that the gentlemen of the house was good for it. After all, it was a 5,000 square ft house in a gated community, and he had pictures with a past president on his wall.
As the story goes, he was just about to liquidate some investments for a new great investment and needed to hold off on the invoices for about 45 days. In our naiveté we agreed, and continued to clean his home twice weekly…He ran up a $3,000 bill, and we finally said enough. We pursued him for months…but never got paid.
The point is, don’t extend credit. You don’t go to the grocery store and ask them to bill you later do you? That’s what banks and credit cards are for.
Our policy is very simple. All payments are due at the time of service, we WILL NOT book a service without having a credit card on file. If the card is declined, you will not be serviced again until the account is paid in full. Commercial clients are Net 30, and we do require to have a credit card on file for these clients as well.
Decide what will work best for your market and stick with it.