Does this sound familiar? A new project comes up and you go to visit the client. After some discussion and gathering requirements, you write up an estimate for the work. You send it to the client, waiting for a response. Finally, you hear back with their approval to get started. This is all in a day’s work.
When it’s time to get paid for the work, things can get a little more difficult. That estimate you sent was hand-written, so where do you go for a copy to prepare the invoice? That delays you in sending your invoice to the customer. Then the customer doesn’t pay right away. All of this can lead to slow payments, impacting your businesses cash flow.
Using the right technology can help you receive payments faster. The key to getting paid quickly is making the process easy for your client. In the world of pen and paper, there’s a lot of work that has to be repeated. Moving to the right technology can get you paid more quickly and make the process seamless for you and your customer.
Keep Track with CRM
The first place to start is by keeping good records on all of your sales opportunities and clients. Customer Relationship Management (CRM) software provides one place to keep all of your interactions with every client over time – including things like estimates/invoices, job records, job photos, and more.
With a good CRM platform, you’ll be able to keep track of all of your customers. By being able to look them up by name, or address, or project name, you’ll be able to quickly find the record you need. By tracking open invoices in your CRM, you won’t lose sight of unpaid work. This is important – the longer you wait for an outstanding invoice, the less likely you are to collect the balance due.
Manage Documents Digitally – and Deliver Them Quickly
All of your documents should be electronic. For estimates, using a Microsoft Word or Excel template is a good starting point. You can convert these documents to a PDF and easily send them to the customer. If it’s a smaller project, it’s even better if you can deliver the estimate on-site as you’re wrapping up the requirements discussion.
Today there are a number of apps for your phone or tablet that allow you to build an estimate that can be digitally presented to the customer and capture an electronic signature on the spot. When you have this kind of technology, quite literally in hand, you’ll be able to prepare your estimate or quote much faster. More importantly, a good app will allow you to convert your estimate to an invoice that’s ready to send for payment. Preparing invoices is a breeze when it only takes a quick review before sending for payment.
When estimates and invoices are electronic, it’s much easier to manage and track them. Even better is when they are integrated with your CRM platform. Having built-in invoice reporting allows you to track the status of all invoices and identify which ones need followup. By doing this, you’ll stay on top of outstanding invoices with ease, and you’ll keep invoices from going uncollected.
Payments Should be Simple – and Electronic
When you’ve sent the invoice, you’ll want to make it easy for your customer to pay. One of the easiest ways to collect payment in today’s digital world is by accepting credit cards. It’s fast and convenient. The concern, though, is always the processing fees. While they can be prohibitive for very large projects, they can offer a great value when compared to the alternative – not collecting payment.
Research shows that receivables lose at least 10% of their value if not paid within 30 days (see graph, above). This means you’re at least 10% less likely to collect anything. By comparison, isn’t the credit card fee worth getting payment more quickly?
With additional arrangements like ACH payments and wire transfers discussed in advance, payment can be just as fast, and at a lower cost. So whether you accept credit cards or ACH payments, consider offering your customers an electronic payment option as part of the upfront paperwork. It makes things easier for them and gives you peace of mind.
Support Your Invoices with Great Documentation
When submitting invoices, sometimes there are questions. Having great documentation can help resolve these before they become reasons for delayed payment. For example, being able to quickly present timesheets for the job can justify hours-billed. Having GPS and time-stamped job-site check-ins from every employee means there’s no question as to the timesheet accuracy.
The information you need to present is available right away when you’ve captured everything electronically. Having job-site photos is another great way to support your invoices. Taking photos of work in progress supports progress payments, and pictures can quickly remind a customer of something unexpected that required additional work. Having the ability to capture electronic signatures on key documents is one more step in verifiable electronic documentation.
Contractor Business Management Software
Today there are integrated platforms for running construction and contracting businesses. These systems integrate all of the functions mentioned above, in one place, and give you real-time access to your business, wherever you are. Mobile business management is a requirement in today’s world.
Getting paid on-time is important in any business. With mobile tools offering CRM, electronic estimates and invoicing, electronic payments, and document management, you can make the process easier than ever for your customers. Having the right technology can help speed up the process and avoid issues that could otherwise delay payments.
The article’s author – Ben Read from FieldPulse – knows a thing or two about the importance of speeding up payments, and we couldn’t agree with him any more.
If you’re reading this, then you’re probably well aware that it takes longer to get paid in construction than in just about any other industry. It’s a huge, widespread problem that adversely affects the bottom lines of many (too many) of you.
Leveraging technology to speed up your company’s processes, especially one as important as getting paid, can have a huge impact on your business’ financial health and give you a sustainable competitive edge over your competition.
Be sure to check out FieldPulse, and get in touch with us here at levelset to see how managing your lien rights can help you to eliminate bad debt and speed up your payments.