In any business, but especially in a small business, cash flow — money coming in and money going out — is important to the achievement of the business. Money going out is the easy part; there are always expenses: rent, materials, equipment, salaries, etc . that you need to pay. But sometimes getting money ahead in from your customers can be a gradual and time-consuming process.
Most industrial cleaning businesses charge on a month-to-month, after the fact, basis.
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Special software program as carpet cleaning and window washing may be added on to the monthly bill or charged after completion. Residential cleansers often charge after each cleaning, which can be on a weekly, biweekly or even once a month basis.
Customers may be gradual to pay, which will adversely affect your own cleaning business’ cash flow. It could imply that you might have to dig into your cash reserves to pay your bills. It may also mean that you have to spend time as a costs collector making phone calls or perhaps also sending out statements and collection sees to remind customers of overdue bills. How do you get your customers to pay for on time?
Start by always having an agreed upon contract or proposal. Although this particular seems obvious it is important to discuss transaction terms in the contract, with approval by both parties. Make sure that your contract includes not only when payment arrives, but what the penalties are regarding late payment.
Include all appropriate information on your invoices. Invoices ought to include more than just the cleaning client’s name and services provided. Include when payment is due, late payment fees and penalties and a contact name and phone number for any questions about the invoice.
Do you provide cleaning services to federal government entities or large corporations? Govt offices and large corporations usually have cut off dates for each invoicing payment cycle. You may have to get your costs in before a certain date or they won’t pay it until the next payment cycle. For example , you may have to get your invoice in by the 25th or it may sit in someone’s in-box for another month. Ask the billing agent or accounts payable department when they need your bill so you receive payment on time.
Send out your billings promptly. You may perform everything for your cleaning business from marketing to meeting with prospective clients to cleaning buildings. It is easy to put some things off, but don’t allow your billings be one of them. Ensure that you send out your bills at the same time every month, or if your contract indicates which you bill right after a service is completed, then send out the invoice immediately.
Several cleaning companies require bills to be paid within 30 days (net 30). Perhaps you could offer discounts when the customer pays their invoice early. Consider offering a 2% lower price if they pay the invoice within 10 days. Many of your clients will take advantage of the discount.
To keep cash flow coming in sooner, consider shortening your billing cycles. Instead of having payment due in 30 days, require payment in 15 days (net 15). To prevent any confusion state the specific due date on your invoices.
Ask for payment forward. Although this is not a typical payment way for a cleaning business, for many additional businesses getting payment up-front can be standard. Offer an incentive for your cleaning customers to pay up-front – discount rates, preferred cleaning times, or reductions on supply prices.
When signing up a new cleaning customer, ask whether they have special billing needs. As with authorities entities, other cleaning customers may have specific deadlines to process invoices. You may have cleaning clients who choose to be billed mid-month and not the finish or first of each month.
Give your clients an alternative of paying simply by credit card. If you don’t accept credit cards consider setting up an account on the Internet (through PayPal or similar payment system). These companies allow you to invoice your clients by means of e-mail and then they can use their own credit card to pay for cleaning services.
Seek advice from your clients regularly to make sure these are satisfied with the cleaning services your organization is providing. Clients have been known to keep payment if they are not happy with their services even though they have not told you there exists a problem!
Remember, your clients are in business to make a profit and so are a person. Getting paid is how you spend your employees, grow your business and pay your bills. Make sure that your payment policies are stated ahead of time, communicate with your clients and provide an excellent service. Keeping a good incoming cash flow is vital to the stability and development of your business. Don’t be afraid to let your customers know that you expect quick payment for a job well done!