Keeping a steady income stream is vital to your portable restroom business. But slow payers, non-payers, and cancellations put your cash flow at risk. Consequently, credit and collections issues can skew your revenue forecasts and leave you in a tight spot.
By assessing and adjusting your payment, credit, and collection systems, you can improve cash flow. It also helps reduce the administrative time spent on accounts receivable. Use the following tips to optimize your cash flow and get paid sooner.
Many PROs are hesitant to require advance payments for rentals. It adds an extra step to the reservation process and may turn off customers unfamiliar with your business. However, asking for a deposit or advance payment can increase your cash flow, decrease cancellations, and help you predict equipment needs.
For starters, consider completing credit checks on new accounts. Depending on the report, you may want to impose credit limits or require half down to reserve a rental. You may also want to insert a line to your terms and conditions saying your company reserves the right to ask for a credit check, deposit, or advance payment for any reason, including credit history.
Ensure timely customer payments by communicating your payment expectations and methods at every touchpoint, including your website, emails, and paperwork. Your customers should understand when payment is expected and what happens if it isn’t received.
Add payment details to your email signature and use a frequently asked questions (FAQ) page to address any concerns about payments, credit checks, deposits, and collections. On paper documents, try highlighting the payment due date and accepted methods.
You can also use various technologies to send automatic payment reminders, such as your invoice, email, and business phone systems. For example, if you require payment before or upon delivery, a quick reminder of your scheduled drop-off time, the total amount due, and payment methods can nudge them to pay now.
The most effective collection activities are convenient. Any digital communications should provide click-to-call and click-to-pay links or buttons. Moreover, your customers should be able to view and pay the bill from their cell phones.
If you require payment upon delivery, consider equipping your drivers with tablets. They can accept and record transactions from the customer’s location while reducing last-minute calls to the office that prolong a drop-off.
Lastly, if you have many requests for credit, take a look at buy now, pay later services. PayPal, Affirm, and Afterpay let consumers pay in installments, but business owners receive the total amount upfront, significantly improving cash flow issues.
You may be hesitant to take advantage of payment solutions due to the fees, up to 6% for buy now, pay later services, and 3% per credit card transaction. Consider offering a discount to customers who pay with cash or pay upfront.
Talking about money with customers can be uncomfortable. But providing concise information and convenient payment methods gives your clients control over how and when they pay. Use technology to automate your credit and collection process so you can get paid on time and improve your cash flow.
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