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Late Payments Can Cripple Commercial Electrical Contractors: Here Are Some Tips On How To Get Paid Promptly

With late payments costing SMEs across the UK thousands of
pounds to collect, and the total amount owed to small and medium sized
enterprises across the country now totally £23.4
billion, it’s clear that this is a serious issue that needs to be
addressed.

This is particularly true for commercial electrical contractors,
as their time is particularly valuable as they’ve had to study for many years
to earn the qualifications needed to fulfil their role. They might need to pay
for additional support, equipment rental or parts, which will be paid out of their
own pocket if the payment is late.

Late payments also affect the cashflow of a commercial
electrical contracting business and can make it hard for it to continue working
profitably.

As such, it’s important that commercial electrical
contractors work to recoup the money they’re owed. Going to court is one
option, but this can take a lot of time and incur considerable costs, so for
those who are keen to avoid going down this route, here are some practical tips
on how you can drive commercial clients to pay their invoices on time.

Provide Your Estimates Promptly

It’s important that you provide your clients with their
estimates and other documents quickly and efficiently, so that they have no
excuse not to do the same to you and pay their invoice on time. If you delay
providing estimates, then they may use this as a justification for their late
payment. One great way to create estimates quickly is to use Ensign, a software
product which will quickly work out how long a job will take and how much it
will cost, then create an accurate estimate of how much you should charge for
it. All you need to do is visit
ensignonline.co.uk to find out more about this innovative estimating
software and how it can benefit you.

Speak Directly With The Accounts Department

Often, when working with businesses, particularly large
organisations with multiple departments, it can be hard to communicate with the
person who will be actually paying your invoice. As such, you should try to
place your invoice directly into the hands of the person responsible for paying
invoices and chase them directly. This will boost your chances of getting paid
swiftly and ensure that your invoice doesn’t get lost on the way to the
accounts department.

Highlight Your Qualifications

Commercial electrical contracting services are expensive
because they require a lot of training, insight and qualifications, meaning
that companies cannot bring this expertise in-house easily. If you ever find
that your customers are late with making payment, or they query why your
services are so costly, then take the time to explain the hard work and effort
that went into earning the qualifications you had to earn to give them the
service they received. You should also highlight the dangers that electricity
poses and make it clear that your services are vital to the smooth running of
your clients’ property and business. This should help them to understand the
importance of working with a skilled and qualified contractor and drive them to
pay their invoice without complaint.

Keep Chasing For Payment

When an invoice is long overdue, it can be easy to forget
about it and not chase it, but this could lead your client to think that it’s
not important. As such, you should make sure that you keep on top of your late
payments and push for them to be paid. You can automate this function on most
phones and email systems, allowing you to set of reminders and send scheduled
messages. This will help to reinforce the message that the bill needs paying
and, hopefully, get your invoice paid.

Offer Multiple Ways To Pay

In some instances, clients could be struggling to make
payment for your services because they do not have the cash ready to pay or are
slightly behind trend and only use cheques to make payment. They could also be
too far ahead of the latest developments in payment technology and only make
payment using innovative new solutions that you don’t currently use. As such,
you should try to offer a variety of payment
methods so that your clients will have no excuse not to pay and can easily
find a way to pay their invoice that suits them.

Put An Interest Charge In Place For Severely Late
Payments

Late payments can seriously disrupt your business and cause
cashflow problems, so if you have payments that are really late, but you don’t
want to go to court just yet, consider charging
interest instead. This will incentivise clients to pay their bills. Send an
updated invoice with the new charges and make it clear that the interest will
continue to be charged the longer they avoid paying the bill. You could even
offer to remove the interest charges from the invoice if it is paid
immediately, to expedite the process and get your finances back on track.

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