chasing late invoices

[Spazz]

Out of interest what way has everyone found is the best way to chance late invoices?

I have tried phoning them, sending letters, sending emails, texting and I always get a not so good reply from the customer which results in them not using me anymore.
These invoices I usually chance are between 2 weeks and 2 months late.

Any ideas would be great, also for those using letters can you attach the letter you use that you find gives the best result.


Thanks all in advance

 

[Guest123]

This company are favoured by many on here.


The Thomas Higgins Partnership | Business Debt Collection Solicitors

 

[RISElectrical]

Usually give them payment period x 2 then advise they have a further 7 days to pay or I will add 8% and after that 7 days I will pass on the debt.

Maybe they won't use you again, however if they are 2 months late paying would you work for them again?

 

[Geordie Spark]

I used to use Thomas Higgins solicitors - find them on google.

I have been known to take my boys (3 of Swan Hunter's finest ex-shipyard lads) to the customer & told the customer to explain to my lads why he hasn't paid my my lads wages for that week. The debt was close on £7k and customer paid it in cash there & then.

 

[Geordie Spark]

Lenny beat me to it !!!!!

 

[Spazz]

I think that is a bit extream for what I need.

I want a nice polite way of reminding them that their invoice is overdue.
For those who just wont pay I have a customer who is a debt collector who I have used before and he seems to get a good result everytime

To be honest most of these have just forgotten or misplaced the invoice, and just need a gentle reminder, but they are not happy with a phone call (just to let you know your invoice was due last week), a letter (same as the phone call), email, same as the phone call, text to some of the regular ones who book work via text (same as the phone call).

They take offence to all.

 

[Octopus]

1. Emailed on first reminder
2. Phone call to follow up
3. Forwarded first email with second reminder polite reminder
4. Phone call to follow up
5. Polite letter stating if payment isn't made within 14 days I'll start legal action....

Works for me, but I rarely get bad payers.

 

[Geordie Spark]

I think that is a bit extream for what I need.

I want a nice polite way of reminding them that their invoice is overdue.
For those who just wont pay I have a customer who is a debt collector who I have used before and he seems to get a good result everytime

To be honest most of these have just forgotten or misplaced the invoice, and just need a gentle reminder, but they are not happy with a phone call (just to let you know your invoice was due last week), a letter (same as the phone call), email, same as the phone call, text to some of the regular ones who book work via text (same as the phone call).

They take offence to all.

Then I would be a bit more ... "selective" ... in choosing my customers, or load the price to cover the late payment & offer a discount for early settlement.

 

[Guest123]

60 days late takes the pee.

After the first invoice date has elapsed by 14 days, they get another one, the same as the first only the terms are 7 days from this date. If another week goes by they get another with lots of red capital letters on it with a further 7 days. If these 7 days elapse I get TH involved.


At the end of the day you've done the work you were asked to do, it's reasonable for them to pay what they owe within 30 days.

I have absolutely no time for people who are crap payers, and couldn't care less if they dont use me again as I wouldn't work for them anyway!


Please note, this refers to small to medium private customers, not to large building contractors and the like. Terms are a whole lot different there.

 

[Guest123]

To add, the final letter is also sent recorded. The more of a paper trail you have , the better.

 

[Spazz]

Most of these are agents and they dont pay till after they have had the rent from the tenent and pay me before they pay the landlord which could be upto 40 days if I do a job just after they have paid the landlord.

I like Murdoch's way, sounds like an idea.

I am meeting with one in the next day of two as they are not happy with how I emailed them reminding that the invoice was late (by 20 days - 30 day payment term(50 days after job done)) Less than £20 so not to bothered, it was just fuel for pricing up a job - they told me to charge them, where as I usually dont charge for pricing jobs.

 

[Geordie Spark]

60 days late takes the pee.

After the first invoice date has elapsed by 14 days, they get another one, the same as the first only the terms are 7 days from this date. If another week goes by they get another with lots of red capital letters on it with a further 7 days. If these 7 days elapse I get TH involved.


At the end of the day you've done the work you were asked to do, it's reasonable for them to pay what they owe within 30 days.

I have absolutely no time for people who are crap payers, and couldn't care less if they dont use me again as I wouldn't work for them anyway!


Please note, this refers to small to medium private customers, not to large building contractors and the like. Terms are a whole lot different there.

They certainly are - if you let them.

One very large company (they make tyres) kept me waiting 120 days for payment for the first job I did for them. The next & all subsequent jobs they paid up-front for !!

That was when I was an Exhibition Contractor & I told them my bank manager doesn't build Exhibition Stands & I don't lend money & if they need to borrow money the should be borrowing it from THEIR bank - not me or mine !!!

 

[Spazz]

60 days late takes the pee.

After the first invoice date has elapsed by 14 days, they get another one, the same as the first only the terms are 7 days from this date. If another week goes by they get another with lots of red capital letters on it with a further 7 days. If these 7 days elapse I get TH involved.


At the end of the day you've done the work you were asked to do, it's reasonable for them to pay what they owe within 30 days.

I have absolutely no time for people who are crap payers, and couldn't care less if they dont use me again as I wouldn't work for them anyway!


Please note, this refers to small to medium private customers, not to large building contractors and the like. Terms are a whole lot different there.

This sounds like an idea Lenny, thanks. I send the invoices via email with read receipt on them so I got the proof they read it. What would you recommend putting on the email?
Please find attached the invoice for (date)? Or be a little more - please find attached a copy of the late invoice??

Opinions?

 

[Geordie Spark]

This sounds like an idea Lenny, thanks. I send the invoices via email with read receipt on them so I got the proof they read it. What would you recommend putting on the email?
Please find attached the invoice for (date)? Or be a little more - please find attached a copy of the late invoice??

Opinions?

How about "Pay up or else!!" ??

 

[needasparks]

I tend to use an overdue remind letter first off giving them any chance to contact me if any of my work has a problem then i go down the friendly route of phone call asking when they will be paying.
At that point I know its going one of two ways, they pay or your able to start legal route early rather than being out of pocket for months before chasing. I normally find its the cold call jobs who give the most problems but i have develeped a nose for them over the years as the warning signs are in the first minute of meeting.

 

[Rockingit]

The 'traditional' polite reminder is to send a statement. Or another good ruse is the little white lie of 'had a hiccup with our paperwork and not sure whether we sent you your invoice or not - here's a copy just in case'.

But it depends on the customer, your relationship with them and chances of future work. But in my experience, clients who don't acknowledge corresponence from you aren't worth the waiting on.

 

[RISElectrical]

A good tip to not appear like your badgering for payment and to be polite is send an "automated" email. That way it looks like the software is reminding them and not you

 

[Spazz]

I have one letting agent who uses me only when things go wrong, they dont put any pressure on EICRs, even though I do state it in the recommendations attached after any work I do on all properties (if not done in last 5 years).

I will try the statement route first and see what happens - I have been thinking about sending statements every 28th of month so they can see what they have had done and on what property. I dont mind waiting a few extra days with this customer but they do tend to lose invoices.
I will also add a line on the bottom saying if they need a copy of any invoice please let me know.


Thanks all

 

[Spazz]

A good tip to not appear like your badgering for payment and to be polite is send an "automated" email. That way it looks like the software is reminding them and not you

I do this but they dont like it

 

[Geordie Spark]

The 'traditional' polite reminder is to send a statement. Or another good ruse is the little white lie of 'had a hiccup with our paperwork and not sure whether we sent you your invoice or not - here's a copy just in case'.

But it depends on the customer, your relationship with them and chances of future work. But in my experience, clients who don't acknowledge corresponence from you aren't worth the waiting on.

My sentiments exactly !

 

[Geordie Spark]

I have one letting agent who uses me only when things go wrong, they dont put any pressure on EICRs, even though I do state it in the recommendations attached after any work I do on all properties (if not done in last 5 years).

I will try the statement route first and see what happens - I have been thinking about sending statements every 28th of month so they can see what they have had done and on what property. I dont mind waiting a few extra days with this customer but they do tend to lose invoices.
I will also add a line on the bottom saying if they need a copy of any invoice please let me know.


Thanks all

There comes a point where you need to ask yourself; "Am I a Spark or a Clerk?"

 

[RISElectrical]

Need to remember that your not in their debt because they gave you work, you did the work and deserve paying in a reasonable amount of time. 30 days from end of month is most I would go to and only for established customers.

You seem like you don't want to annoy the customer however they are breaching payment terms. If they booked you for a job and you forgot to turn up would they not want to call you so they didn't annoy you? I don't think so

 

[Spazz]

Thanks RIS you have a point there.

This one company has generated about 60% of my work since I started (in January) - hence why I dont want to **** them off.
They have told me that I will be doing a 3 bed new build they are starting to build next month, so a few £K profit on that.

This Agent told me that they only pay after they received their rent from tenant - fair enough.


My biggest problem is that in Pembrokeshire there is limited work (like I bet is the case everywhere) and there are over 30 electricians in this area.
Im different to most of these as I offer a 1 stop shop - basic plumbing, carpentry, electrical, gardening, cleaning (my partner anyway), etc.

If there is something that needs to be done then I will do it.

I put out 30 leaflets yesterday in local shops/pubs/etc so see if that brings in any work - already got 1 new build in Sept and a EICR on their shop and Flat (all from 1 customer), but nothing now till then.

My partner is doing 2 hours of cleaning every week and thats all she has - she claiming benefits for us, and we let them know when and how much I earn per week.

 

[Guest55]

I do this but they dont like it

So what if they dont like it ? i dont like working for free either.
If you worry about upsetting some office goon when you dont get paid youre gonna get walked all over.

 

[sedgy34]

you really should have a proceedure in place, Do ask politely as you are only asking to be paid for the work THEY instructed YOU to carry out!
if there are no issues with your work they should pay within your terms stated on your invoice,any other work they ask you to do explain to them you can only offer 14 days before being paid.

i seem to be the expert now having nobs owe money to me but thats another story.

 

[needasparks]

So what if they dont like it ? i dont like working for free either.
If you worry about upsetting some office goon when you dont get paid youre gonna get walked all over.

sounds like they already are. Agents are best handled at arms lenght, if work is as dry as he says in the area then bet your life the agents know it and are milking it. strange breed and IMO only slightly above car dealers.

 

[Spazz]

thank everyone - as said this agent only gives me work when something goes wrong.

The last job I had with them - I put a new ceiling rose up - easy but they had an old lady in there - it had BS3036 fuses in it, told them to get a RCD on it as there was a shower (not on RCD) - NOTHING TO DO WITH ME! and nowhere near I was working - saw it after I did the job.
The landlord said no! - 1 week later the CU caught fire - Shower was on for over 35mins then stopped - some prat put a 4mm cable instead of a fuse wire!
No damage lucky! a few burned cable ends, black fuse box (inside) etc.

After salvaging all the cables and extending them - new CU (with RCDs) an testing a simple job of £300 (EICR and RCD or CU change) - turned into over £650.

all could have been saved with just saying yes to £300 - would of picked up the cable in the fuse!


Same as another job they gave me - old man fell down the stairs because there was no switch at the bottom and he had to walk up and back down to turn the light on to see to go to the kitchen.
Again I told them 1 week before that is not safe as he sleeps downstairs as he cant walk up the stairs easy - few £K compo and the work for a new light switch downstairs instead of doing the job in the first place.

 

[Geordie Spark]

Nicholas.

In my early days of business, I met an Irishman in a pub who was a business advisor. He was brilliant & over the following couple of years I learned a lot from him.

One of the things I learned is that credit is not a right - it's a privilege. In other words, you don't HAVE to give them 30 days to pay - you can insist on payment upon completion, payment before the work commences, half payment up front & the balance on completion, or whatever terms YOU are comfortable with.

I was always very careful about Credit Control so much so that the most money I ever lost was just under £2k over an 11 year period. I later sold my business to one of my competitors who then managed to somehow lose an average of £4k per month until the whole thing went bust 18 months later !!!

I must have been doing something right over all those years !!

 

[Spazz]

Thanks Geordie Spark - I do credit checks on every business. No credit check or poor credit no credit applied! at most 5 days - good credit - Above Average only! the get 15 days, anything over Very good they get 30 days.

I credit checked a customer 99/100 (fantastic credit) and she moaned because I agreed to give her 30 days - she just expected me to give her when ever she wants to pay!

They canceled all work there and then and made endless problems for me since

 

[Geordie Spark]

Thanks Geordie Spark - I do credit checks on every business. No credit check or poor credit no credit applied! at most 5 days - good credit - Above Average only! the get 15 days, anything over Very good they get 30 days.

I credit checked a customer 99/100 (fantastic credit) and she moaned because I agreed to give her 30 days - she just expected me to give her when ever she wants to pay!

They canceled all work there and then and made endless problems for me since

Count your blessings bonny lad ....... that's the sort of customer you do NOT need !!

 

[Marvo]

The problem with getting paid late is that it costs you money and makes running your business difficult with erratic cash flow. Late payers can sink a small business.

In the short term you have every right to press them for overdue amounts and they have no right to be offended by your attempts to collect!! Every time you pursue them you need to get a firm commitment from them as to when and how much they're going to pay. Don't end your contact with them until they give you a firm commitment. Remind them a day before the date they've promised and even again on the actual day. If they fail to make good on their promise then contact them again and get a new firm commitment whilst letting them know how much financial trouble you're suffering due to them letting you down.

In the longer term maybe you should look at adding 5 or 10% to your future quotes and offering them that same percentage as a prompt settlement discount. It will ensure your invoices are at the top of their pile and at least that way it's not costing you so much if they still drag their feet.

 

[DurhamSparky]

your a business not a charity!!!! what would you do if you never paid your elecy bill...!! end of story!!

thomas higgins !!!! im about to issue 2 in the next 5 minutes!! i dont care about repeat business from crap customers!!

 

[Spazz]

Exactly - now they are claiming I paid them twice - no proof - so handling this at arms length!
£100 worth of PAT Testing

 

[Geordie Spark]

your a business not a charity!!!! what would you do if you never paid your elecy bill...!! end of story!!

thomas higgins !!!! im about to issue 2 in the next 5 minutes!! i dont care about repeat business from crap customers!!

It's the Geordie way innit !!!

 

[Hiddo]

I tell my customers that payment is to be made on completion.

I have a few (Select Few) customers that I allow extended payment terms.

A landlord I started working for tried it on by dragging his heels with payment. So I just told him next time he rang to get the yellow pages out and find someone else!! He now pays within 2 days and drives to my house with the money.

If people take umbrage at the fact you want paying then you should refuse the work. Most people just need managing properly and once you've done that they will pay.

 

[DurhamSparky]

too bloody right!! i am lucky to get excellent repeat customers and also new customers!! people who haggle and twist can eff... off..! plenty of "desperate" sparks out there to take that end of the market!

 

[Spazz]

I know the feeling - I am new and need the work.

I have nothing booked in now till September and really not a clue on what to do to get work in - so I tend to take all the s*** jobs.
Its like Im doing PAT Testing on 22 items in September then again the year after, also got a new build off him in September and an EICR on existing 2 properties so I dont mind - just role on September!

I just had one - see other post about RCD and shaver point, but thats a days worth of work and if its an easy job then thats only £30 in my pocket - any ideas what else I can try to get work in and these non payers can disappear!

The non payers are always agents - got £400 outstanding now with them in total!

 

[Geordie Spark]

I know the feeling - I am new and need the work.

I have nothing booked in now till September and really not a clue on what to do to get work in - so I tend to take all the s*** jobs.
Its like Im doing PAT Testing on 22 items in September then again the year after, also got a new build off him in September and an EICR on existing 2 properties so I dont mind - just role on September!

I just had one - see other post about RCD and shaver point, but thats a days worth of work and if its an easy job then thats only £30 in my pocket - any ideas what else I can try to get work in and these non payers can disappear!

The non payers are always agents - got £400 outstanding now with them in total!

The first trick you need to learn is to ALWAYS start the way you mean to go on. It isn't the easiest trick to master, but it's easier than trying to make changes later on.

The next trick is ALWAYS make sure that all of your eggs are not in the same basket - again not an easy one to pull off, but it's what you need to aim for.

In my early days, I was turning-over £12k per month, but £7k of that was from one customer. It was a scary position to be in and I was very relieved when I was able to increase by customer base so that that one customer didn't have such a significant hold (for a hold is what it was) on me.

 

[Spazz]

Thanks for that Geordie.

I am in the situation where my only customer (using me regular) is this one who pays mainly on-time but 1 out of 5 invoices are delayed by 1-2 months. First Month brought in £3,000 off them alone - now its gone down to below £500 every month!

Considering they have over 100 properties they manage something is not right - things must go wrong more often than they are!

My problem is I am putting to many eggs in 1 basket!
Electrical, Basic Plumbing, Gutter Protection, gardening, cleaning (my partners side), window cleaning, need I go on - none are bringing work in

I am considering using owens Property Development as the mother company but then having Owen Electrical as the electrical side - just incase I am scaring people off with having to many eggs in 1 basket

 

[trev]

To be honest most of these have just forgotten or misplaced the invoice,

My backside. Come on mate that's the oldest one in the book 2nd oldest is the cheque was posted 10 minutes ago. There is a type of customer who thinks it's perfectly acceptable to not pay the guy working in their property for as long as possible and that the contractor should be grateful for the work and the eventual payment when they can be bothered.
There's who got a knock on the door for £50 that she owed me for work on a student flat in Newcastle. She had the gall to ring me to complain, because I knew the debt collector had been paid I told her never to ring me again under any circumstances.
You do a good job you deserve to get paid when you say not when they can be bothered

 

[Spazz]

The reason I said that was 4/5 times they pay me within 1hr of having the invoice, just the odd one here and there it takes months. Theres 2 of them in the office - 1 is really good, other is slow.

I think they might have another spark to be honest as I have had 1 job in last month - dont believe nothing has gone wrong in 1 month (after seeing the state of some of these electrical systems)

I issued a EDN for no bonding 2 months ago and they still not asked me to sort it, so not sure whats happening there.


It might be time to move on Im thinking but we will see.

 

[Dale200bhp]

Depends what sort of character you are but I tend to go round there house and get hold of them if I have to, I always get paid then!
Sometime you just have to get nasty, onebody in the construction industry made monet through being nice.

 

[Rockingit]

I am considering using owens Property Development as the mother company but then having Owen Electrical as the electrical side - just incase I am scaring people off with having to many eggs in 1 basket

As you wish, but it still won't make getting invoices paid on time any easier!!

 

[Spazz]

I was thinking of doing it on an advertising basis only. I was thinking that having electrical in the name or electrician it would be easier to search on google, more customers less need to rely on these agents for work when payments are slow.

The problem I have is if you search Electrician Pembrokeshire on Google I don't come up on the first 10 pages (gave up after that), on the map Im a little dot - nothing bigger, yell - Im top of the free listings (top on the mobile app)

I have a few joe public customers now and they all pay before I leave. Most of these companies around here expect credit and credit is not one I can afford especially when I have to pay for parts on purchase (poor credit rating)

 

[Guest111]

If you can afford to let people pay when they feel like then you can,t be that short of money,sorry to sound harsh but at the end of the day you lay out for materials and fuel to get to the job and then they walk all over you.Ok you,re new to the game and say you are frightened these "customers" will go elsewhere, well have you not thought that maybe they,ve been elsewhere already?you can only shaft so many people before you get a bad rep maybe everyone else knows they are bad payers and nobody else will do the work so to them you,re the only mug left tell them you want payment on completion of job in future, if you want to work for nothing then there is loads of work out there.Problem is you are supposed to be running a business not a charity.

 

[Spazz]

Thanks Phil

I was thinking last night - I been looking after every other F***er and not me!
It stops here.

All future invoices will undergo pay on receipt of invoice (usually before I leave).

The 1st agent has just paid me - just waiting for the 2nd now.

If they don't like then I will tell them to pass my details onto the landlord or find someone else. Im going up to see the 1st agent on Monday so Im not sure how thats going to go.

Im also increasing my prices back to what they should be - I have had enough of doing favors for people

 

[Guest111]

Thanks Phil

I was thinking last night - I been looking after every other F***er and not me!
It stops here.

All future invoices will undergo pay on receipt of invoice (usually before I leave).

The 1st agent has just paid me - just waiting for the 2nd now.

If they don't like then I will tell them to pass my details onto the landlord or find someone else. Im going up to see the 1st agent on Monday so Im not sure how thats going to go.

Im also increasing my prices back to what they should be - I have had enough of doing favors for people

Yes well done mate now make sure you stand on it! when I was doing the job I used to call myself Dirty Harry,people asked why and I replied well I get all the crap jobs.Need a spark to come out cheap at 10pm friday? phone Phil,need a spark to crawl through a filthy sub floor? call Phil, need a spark to do a live joint in the rain? call Phil.Need a spark to do a nice bit of pat testing and pay him up front? oh yes we,ll ring Tommy down the road! been there done it mate just made me ill if you,re a decent spark they should pay when jobs done, if you dont want to sound funny next time someone rings up tell them its strictly payment on completion with no exceptions as you had someone not pay up and you can,t risk it happening again. best of luck with the job just keep going and you will get there.

 

[Spazz]

Thanks Phil

I only have 3 customers who I gave credit to:
2 Agents and 1 multinational company

the multinational company was for pat testing - I know I will get my money from them - they work for power stations, but could not find a spark to PAT office equipment in a power station so I explained the problem with insurance and told them if they wanted to bring it down to the carpark where I would do them all in my van then happy days - they snapped at the offer - 80 items later and 6 hours Im happy - £200 in my pocket (with fuel) - dinner and drinks provided as well - easy job!

For everyone's info the items where computers, scanners, printers (small), electric radiators, phone chargers - all used in offices - so never out in the power station.

The company in question does the scaffolding in the power station.

My insurance was happy

 

[Guest111]

Just proves the agents are t****** then doesn,t it!

 

[Rockingit]

Thanks Phil

I only have 3 customers who I gave credit to:
2 Agents and 1 multinational company

the multinational company was for pat testing - I know I will get my money from them - they work for power stations, but could not find a spark to PAT office equipment in a power station so I explained the problem with insurance and told them if they wanted to bring it down to the carpark where I would do them all in my van then happy days - they snapped at the offer - 80 items later and 6 hours Im happy - £200 in my pocket (with fuel) - dinner and drinks provided as well - easy job!

For everyone's info the items where computers, scanners, printers (small), electric radiators, phone chargers - all used in offices - so never out in the power station.

The company in question does the scaffolding in the power station.

My insurance was happy

Did you ring the insurers first and explain the situation? They'd have probably OK'd that as you're not actually working 'on' a power station.