Covering my back when customers don't pay/cancel work....

[Pete Hart]

In the last 3 months I have had a number of people cancel work at a days notice, and customers who have taken an age to pay (in one case not at all!) and argueing the toss about the final bill or the ammount of work to be done.

 

I am fully aware that I only have myself to blame, but its clear to me that peoples word and a handshake has little value anymore.

 

Now instead of moaning and boring arbtalkers to death with my woes (my fiance' has more than had enough!), can anyone pass on some advice about sales purchase orders or any other methods of paperwork to help tighten up the whole process of quoting and recieving payment?

 

My current method (clearly not good enough!) consists of either agreeing price and work on site and shaking hands, and in most cases posting or emailing a confirmation of the quote. I do my best to itemise everything including the task, price etc. Then at the end of the job I either take payment there and then or if requested issue an invoice.

 

I cant help but think that getting the customer to sign a sales order detaling the exact task and price could help me recover monies and prevent the 'can you just'/'whilst yor here' scenarios as well as cover my back when people cancel the day before because they have got someone £300 cheaper to do the job!

 

Any advice, your imput, and thoughts will be greatfuly recieved....

 

Thanks in advance

 

Pete

Edited January 31, 2013 by Pete Hart
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[Paul Cleaver]

a verbal agreement is all I do alot of the time and I very rarely have a problem. I give a verbal Quotation not an Estimate. Estimates gives flexibility Quotations are static.

Be clear about this and you shouldnt have problems

[Pete Hart]

Your right about that. I avoid estimations and always give a fixed price.

Ironically I just checked my online banking to find i've finally been paid by one customer who has been hanging it out since the 5th november!!!

 

on my invoices i state 'payment in full required within 7 days from date of invoice'

 

Does this hold up and have any weight behind it?

[woody paul]

I have been lucky so far only a couple of people that didn't pay on time (month) sent a reminder still nothing after 2 weeks then went and knocked on door cheque handed to me. In my eyes every one is the same untill they get there face on money.

[treequip]

on my invoices i state 'payment in full required within 7 days from date of invoice'

 

Does this hold up and have any weight behind it?

 

You need to get your terms and conditions into the quotation so that the client knows what they are buying and what is expected of them, chucking it into the invoice isnt good practice

[aiden]

you doing things right if you do writtern quotes and confirm by email ( keep these emails).

You also need to have on your quote a seven day cooling off period so you comply with the door step trading regs. ( even if people call you , to come to there house and quote). Doorstep selling - The Office of Fair Trading

all of the above means you can take none payers to small claims.

As for canceling work you can only recover lost exspences so in reality not much you can do there.

[Rick2517]

a verbal agreement is all I do alot of the time and I very rarely have a problem. I give a verbal Quotation not an Estimate. Estimates gives flexibility Quotations are static.

Be clear about this and you shouldnt have problems

 

I also give verbal quotations 80% of the time, I have found that for the amount of times this backfires (not often) it's not worth the extra hassle in wrighting quotations for every customer (we can quote up to 10 jobs per day)

However Being a good judge of character does help in these situations. I find that you usually get a feel for the typ of customer within the first 10 seconds of meeting them, if they come across in any way of being the "can you just type" or the "how much for cash, and can you do it yesterday" type then I will then insure that a writen quotation is signed by both parties. Also any commercial work is always put in wrighting.

Also terms and conditions need to be clear:

Pay within 30 days or extra charges of 5% per day will be applied.

If job is cancelled withing 48 hours then a fee of 50% of the job price will be charged.

If nesting birds are found then a rescheduled visit will be charged for.

And so on......

 

If they don't pay I give them 3 chances

1: ring them on 30day point

2 ring them on 40 day point

3 send them snoty letter on 50 day point

If still no payment you can then pay small claims court £25 to send a warning of court action letter if they do not pay.

I have never had a customer not pay when using this system!!

 

Hope this helps

[Pete Hart]

Thanks for the advice

 

Treequip, i appreciate that input. Your right Terms and conditions given to customer at quoting stage is the correct way of doing it.

[Pete Hart]

Thanks for the link Aiden

 

Do you have to have issued a formal quote i.e email/letter to go through small claims court procedure if you don't get paid by a customer? essentially i supose im asking what evidence do you need other than the fact that the work has been done!!

[Rupe]

I have a terms and conditions but have never used it. If I met someone who I thought needed to be told the t&c's then I probably wouldnt want to work for them but work is work. Trouble is that kind of person will always go with the cheapest quote and from the company that doesnt do a t&c's, so by using t&c's you are going to lose the customers that want to mess you around an potentially upsetting those that never would mess you around.

 

As for "while your here" and "can you just" I dotn mind doing extra things if they can be done within the time that I planned to be on that job, AND as long as the debris from them doesnt take up space on the truck that might prevent us from fitting the next job in.

 

I'm quite happy to say NO, but if they made tea etc. and asked nicely then extras can be done.

 

I do however write proper quotes that explain exactly what we do, and I'm not the cheapest around so I guess anyone getting me to do the work isnt going to be too much of a pain but yes it does happen.

 

T&C's wont make much or any difference in a small claims court. A written quote is all thats needed really, unless you t&C's are written by a lawyer then they are unlilkely to help but if you try and contract get customers to sign somethign beforehand you'll lose the good ones and the bad ones IMO.

 

There has to be an element of handshake/trust (for domestic work) this is a service industry, but the back up of a decent quote is needed these days, and evidence that the work has been done but no quote is no good in a claims court.

 

So if you are felling a tree, a quote saying "fell oak tree £300" is not much good. Try and elaborate more on what you are going to do. "we would dismantle the Oak tree and remove to ground level, taking care not to damage the lawn £300" sounds a lot better IMO.

 

But then its important to stick to your side too. I know a lot of firms who quote for a dismantle/rigging job and then on the day they stunt fell it in half the time and expect the customer to pay the same amount. It works both ways, deliver waht you said you would do and the customer should (hopefully) do the same.