Monday, 14 February 2011
After a very interesting conversation on Twitter the other day with Roberta Ward (@RobertaWard ) Keith Kelly (@pagroupuk) and Hanna Coleman (@DREAMWALLS) it prompted me to write a blog on the joys of receiving payments as a business in these current times.
Now this not being paid on time malarkey has always been there I know, but this last 18 months have been very trying indeed, some people just don't want to part with there money even though a good job has been done. Some companies have been put out of business because of it and I am constantly looking at ways to reduce it as I am sure a lot of companies are.
Maybe I am old school with my views but I never understand why a person or business would have no intention of paying for a service they have requested? Especially if they are happy with the outcome. Perhaps it’s about how far a person/company will go? I am no credit angel believe me, but I’ve never been that person to not pay a bill until I am threatened to be cut off for example, but I know for some people this is no big deal to them.
A lot of people think Commercial companies would be our problem payers but to be honest, with us its mainly Domestic customers at the moment. Don’t get me wrong some Commercial companies are difficult to get payment from and our Solicitors have to give us a helping hand sometimes, but this delay in payment is usually due to a chain of people giving approval of a payment or waiting for a signing of a cheque/BACS run.
Saying that, last year we had a company owe us thousands of pounds of work and they went into liquidation. Due to the amount of money they owed we were at the bottom of their very long list, so we basically had to write it off which no-one wants to do of course. The worst bit of all was there sister company contacted us just after Christmas who we had also done work for at the same time, to say how they had misplaced their certificates we had sent them and could they have another copy? We couldn't believe the nerve they had to call us!
Maybe it's the payment methods that we offer our customers that makes us prone to non-payers? We don’t use a credit card machine yet as we can not justify the costs involved at the moment with how many domestic customer's we have. We take payment after works are complete which is accepted by cash, cheque or a 7 day invoice which in some cases is the only option (landlords for example). We are however looking at Paypal at the moment also as another option and to make it easier for our customers to pay us.
The biggest debate we have in our office is how far do we go before saying “we would like payment first please” without panicking people into thinking we’re a ‘dodgy company’ that wont give our customers their electrical certificates until they pay us. My Managing Director has very strong views personally and professional about not paying trade’s people upfront until all works are complete and I do understand his point but at the same time if we give out or complete all the information required from us, how is payment guaranteed if the customer has everything they need?
This is not an everyday problem for us, a lot of our customers are good payers but there the odd few that can cause worry and concern with how much they owe us and what affect that will have on us. 9 times out of 10 a Solicitors letter does do the trick but still time and cost is involved in this process that could be used elsewhere.
I would really be interested into hearing people’s views on this topic, whether you are an electrician or own a company and how you avoid such issues or even if you are customer and what payment terms you would expect from a service like ours?
Sorry if I sound like I am having a rant but in these current times cash flow is what keeps my families business afloat so it is a subject very close to my heart and I am very passionate about keeping Fulcher Edwards Ltd going for another 30 years at least!