Cleaning Business Payments – Receiving Cash from Clients
There are many ways for a cleaning business to receive payments from their clients for the services that they provide. It is up to you as a business owner to set out what payment options and terms you are prepared to accept. Offering more options and flexible payment terms makes your services more marketable but can also lead to headaches and add unnecessary risk. Below we have set out some of the ways that you may collect money from your customers and some of the advantages and disadvantages of each method.
A Cash Business
Cash has traditionally been king in the cleaning business, particularly in the house cleaning sector. Many small cleaning businesses operate under the radar so to speak, collect cash only and are therefore able to avoid taxes.
However having a ‘cash only’ policy has it’s limitations and if you intend on starting a serious business and running it legally and professionally then it is advisable to declare your earnings and to keep everything honest and above board.
Having clients leave an envelope out for you or a trusted employee to collect is simple. The main advantage is that you won’t have to risk having their account fall into arrears as it is always paid up to date. Whether or not you leave a receipt will help determine how professional your customer perceives your business to be.
Cash or check is still the best method of collecting cleaning business payments if customers agree to it.
Another option that can be just as good as cash is having customers set up a direct debit from their bank account. Your fee can then be automatically transferred to your account on a regular basis. If your charges are the same each time and you are cleaning on a regular schedule then this method can work well. Of course you must check your account regularly to make sure that payments continue to go through and have not been cancelled.
Lot’s of people like to pay by credit card these days due to the convenience and the loyalty programs that some of them offer. While offering customers this payment option will help make your services more marketable it will also give you more headaches.
The systems that you need to set up to receive this form of payment can be expensive and there are fees to be paid on each transaction that can eat into your profit margin on each job. This option is usually only considered by larger cleaning operations
If you do test this payment option make sure that you mention it in your advertising and you may find that the increase in business offsets the loss of set up costs and charges.
Another option is to leave or mail customers an invoice to be paid at a later date. This option is most likely to be used by office cleaners and janitorial services operating in the commercial market. It is not generally advisable for residential house cleaning services to offer such flexible payment terms.
Invoices usually offer the client favorable payment terms with most requiring payment within 30 days. This offers clients great flexibility and helps with the marketing of your cleaning services. However problems can arise if accounts become overdue and you have to spend time chasing bad debts or have to write them off all together.
If you try this method make sure that you clearly state the payment terms on the invoice. You can even mention that a small fee will be charged on overdue invoices each month in order to help your company offset the costs of carrying the debt.
Each Cleaning Business is Different
The payment methods and terms that cleaning businesses offer to clients will differ depending on the sector they are working in and the kind of clientele that they clean for. Successful cleaning businesses strive for the right balance of offering customers choice as well as lowering their risk.
Try to make paying for cleaning services as simple as possible for your company and the client so that everyone wins and so that your business and relationships with customers will grow