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When you got into the cleaning business you most likely didn't think that one of your roles would be “collection agent”. You provide the service and your customers pay their bill; simple right? Although the majority of your customers will pay on time, you will run into customers that are slow paying. Many business owners find themselves having to spend way too much time trying to collect from slow paying customers rather than spending their time moving their business forward.

What can you do to collect money owed from slow paying cleaning customers?

There is no way to guarantee that all of your cleaning customers will pay on time, all the time; but there are ways you can help prevent collection problems before they start.

One of the first steps to take is to define your payment expectations with your customer before you begin their cleaning service. Your formal agreement should include the exact services you will provide, how much those services cost, when they can expect to receive the invoice, payment terms, and when that payment is due. If you plan to charge late payment fees, include that information as well.

Avoid potential payment problems by staying on top of invoicing. Schedule a time period for sending out customer invoices and keep to the schedule. How can you expect your customers to pay on time if they never know when to expect your invoice?

Customers who receive a regularly scheduled monthly invoice are more likely to pay on time, period. If you're mailing the invoice make sure it is addressed to the person who will be handling payment. The last thing you want is your invoice being sorted as junk mail and trashed. Also check invoices for accuracy before mailing them. Most customers review invoices closely and won't pay an invoice with errors and shouldn't be expected to.

Make sure your customers understand your payment terms by taking the following steps:

When you bid your cleaning services for prospective customers, you put together a cleaning proposal. This proposal outlines the cleaning services you provide, the frequency of service, the price for the routine services, and the prices for any project work to be performed. It should also explain in a clear and concise manner your payment terms.
The proposal will also include a short, one or two page contract or agreement that both parties sign. Included in the contract is a section that states when you will send out invoices and when payment is due, along with any other payment terms.
When the customer accepts your proposal, verbally review the contract and conditions. This way your new customer knows when to expect their invoices and when payment is due. This is also a good time to review the list of specifications for general cleaning and the services that will require an additional charge. Make a note on your file copy of the contract when you spoke to the customer about the terms of the contract. If necessary, you can refer to this conversation when reminding a cleaning customer that his or her account is past due.
Consider invoicing in advance. Most commercial cleaning companies are using a prepay system where the customer pays for the upcoming month's services at the beginning of the month. This will help improve your company's cash flow.

What happens when the customer doesn't pay and you want to keep the relationship going?

First, start the collection process with a phone call. You'll find that most customers didn't intentionally ‘not pay'. Rather, the invoice was misplaced or a bookkeeper went on vacation before making payment. In most cases, customers will pay the invoice soon after receiving your call. If you don't receive payment within a week of the call, follow up with another phone call.
Still no payment? It's time to visit your customer in person to remind them of the late payment. Bring a copy of the invoice and past due statement showing their current balance due. It's difficult for your customer to ignore the circumstances when you're face to face.
If two phone calls and a face to face don't result in payment, start sending collection letters. The first letter is a friendly reminder that payment has not been received and you'd appreciate immediate payment. The second letter will be a firm statement that lets them know that if payment isn't received by a certain date (usually within one week); you'll stop providing cleaning services until the account is made current. If you need to send a third letter, let them know you'll be turning it over for collection and provide them a date when that action will take place.
If possible, separate yourself from the collection process. Ask someone else in your cleaning company to serve as the collection agent. You might have a spouse, partner or bookkeeper who can make phone calls to remind customers that payment is past due. This puts distance between you and the collection process.

What happens when you do your part but cleaning customers are still slow in paying?

It's important to have a procedure for addressing late paying (or nonpaying) customers.

Consider charging late payment fees. Even if you don't actually charge your customer late fees, you can use them as a bargaining chip. Your collection agent can call and let the business know that as long as you receive payment within a week, you will waive the late fee.
If your customer continually pays late, set up a face-to-face meeting and once again go over the terms of the contract. Face-to-face meetings give you the opportunity to ask if there are any problems. Make your customer aware that if there are issues with the service, they should contact you immediately and that withholding payment is not the proper procedure for handling disputes.
If payment still is not made, perhaps it's time to suspend the customers cleaning services until payment is received. You don't want to wait too long to initiate this action simply because the longer it takes for you to get paid, the less likely it will be that you can collect the entire debt, especially if your customer is struggling. You should have a policy in place for situations like this. For example, “If payment is not received within 60 days of past due, your cleaning services will be suspended until full payment is received.
If necessary, consider arbitration as opposed to other legal actions. This is less costly for both parties and issues are resolved faster. Other actions you can pursue include sending the past due account to a collection agency, going to small claims court, or hiring an attorney. If you do have to call in an arbitrator or take other action, give your customer one last chance to pay before you bring in a third-party.

Always deal with your customers in a professional manner.

Make sure your agreements are in writing and repeat the important parts of your contract verbally. If you encounter a disagreeable customer, respond calmly and slowly, but be assertive. Treating your customers fairly and doing a good job will help to ensure that your cleaning customers will pay on time. However, it's important to have procedures in place for those few who don't want to follow the rules.

For more information about poster requirements or other compliance assistance matters, you may contact the U.S. Department of Labor at 1-866-4-USA-DOL

How to Collect From Slow Paying Cleaning Customers

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