The age-old problem of getting paid. It’s worth mentioning from the start that the majority of homeowners are good payers. They pay installers on time, most of the time, and are reasonable people.
However, you cannot escape the difficult customers out there, and it does seem that there are more than there used to be. This post has been created in response to a post on one of the industry Facebook forums, with an installer frustrated at not being paid after doing their work.
Fenestration game has changed
It still surprises me how many installation companies operate on no or very low deposits. It’s a very trusting way to operate a business, and whilst most clients are reasonable and legitimate, it does leave a company open to abuse by those who wish to cause trouble.
As I mentioned above, this post has been created in response to a Facebook forum where an installer had undertaken some work, but after completion the client was impossible to contact, making it difficult to get paid.
Over the last two years, our industry has undergone so much upheaval and change. The trading environment has drastically altered, and the cost of our goods to homeowners has gone up a good 30-40%, maybe even more in some cases. It is against a backdrop like this, where the challenges are extreme, installers have to prioritise getting paid.
That means a few things. First, take a bigger deposit. Even if 99% of your customers can be trusted, the 1% cannot create so much stress and hassle that it cancels out the positive energy of the rest. We have all felt that anger and frustration by a client that refused to pay for something unreasonable, or sometimes a bare-faced lie. Installers, start taking chunky deposits. If you have to pay your supplier upfront for your goods, make sure the deposit covers the costs for the materials.
Second, start taking stage payments on larger jobs. We never used to do this at our place, but a few years ago after having a very protracted and farcical argument with a customer who was withholding a substantial sum over a less-than-substantial issue, we decided to take stage payments on bigger contract values. Turns out almost everyone is OK with this and we have not looked back since. The extra money being paid sooner protects the business, pays staff and suppliers and leaves you at less risk of being taken for a bigger amount if the client turns out to be a rogue one.
Third, use contracts. I know some of you reading this still like to do things verbally, but this leaves you wide open to abuse, and a “he said, she said” style argument if things go sideways. Get everything in writing, in detail, with clauses that protect both you and the customer. Then get them to sign it. That way, if you ever have to take a dodgy client to court, you have all the proof you need to show that you are in the right and they are in the wrong. If the client doesn’t want to sign a contract then you probably shouldn’t be dealing with them in the first place.
Fourth, leave small balances. From experience, on larger contracts where people have been happy to pay stage payments, they have also been happy to leave smaller balances. Don’t give the bad client an excuse to withhold large sums from you for menial issues like scratched handles or a mark in a sealed unit. A small balance left outstanding removes that power and puts more leverage in your hands. You control the situation at this point, just make sure you solve whatever the issue may be.
Unlike any other sector
Would you go into a supermarket, leave with a trolley full of shopping, then tell the staff that you’ll be back in a few days to pay once you’ve eaten what you took? No.
Would you order something from Amazon, have it delivered, then decide to pay for it after using it for a week? No. You have to pay first.
Would you book a holiday, go on that holiday, fly back and then decide to pay depending on your enjoyment of that holiday? Hell no! You pay, then you fly.
So why should our sector be any different? Installers have bills, staff wages to pay, suppliers to pay and sometimes upfront, vans, buildings, tax and so on. I don’t believe that it’s unreasonable in 2021 for an installer to be able to ask a homeowner for more of the money for the contract upfront. I am not aware of other big-ticket sectors where you’re able to order products, have them delivered/installed first and then pay after.
We have to start to change that, and as individual businesses, we have to be brave enough to protect ourselves even if our competitors don’t. Our goods have become way too expensive and supply has become far too fragile to leave ourselves open to rogue clients who want to make life difficult. As most installers will know, it only takes a couple of high-value contracts to not be paid to put a small installations company at severe risk of going under.
That is why we have to focus now on getting paid. Times have changed. The trading environment is very different to what it once was. And the few customers that want to make life difficult can also be the ones that do the most damage.
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