Six Ways For Contractors To Get Paid Faster

For many contractors, waiting for payment for a completed job is painful and it can harm your business.  Getting your customers to pay quickly is usually a straightforward process, but it requires diligence and follow up:

1. Send The Invoice ASAP

The first step in the process is to make sure you get the correct contact information.  As common sense as this seems, this is probably the biggest reason that construction invoices aren’t paid on time.  If the invoice is sent to the wrong address, or contact person you can expect a huge delay and strain on the relationship with the consumer. 

Additionally, make sure you send the invoice the day you finish delivering your construction related service. Being prompt and getting the invoice to the consumer while the job is still fresh on their mind is crucial. 

2. Send the Invoice Electronically

Today the business world operates over the internet, and construction companies need to adapt quickly.  Painters and plumbers may have perfected an age old skill, but they need to enbrace the digital age and send an invoice over email.  Electronic invoices might not be your thing, but it will get you paid faster.

(time for some shameless promotion!) ConstructionVault.com offers a service that is easy and free to use.  It allows you to send a construction invoice over email. It is professional and your client can print out a pdf and send in payment or pay easily with a credit card. 

3. Leave The Terms Off The Invoice

Every service I can think of requires immediate payment.  Getting your car fixed or visiting the dentist requires immediate payment.   Buying a lawnmower and getting a massage require immediate payment. Construction services shouldn’t be any different. Repeat after me: "I" should get paid immediately for my construction related work". See how easy that was?  Get out of the “net 30” mindset and you can tactfully  let your client know that payment is due upon receipt of the invoice. 

4. Include A Friendly Encouraging Note

Use the comments section of the invoice to let your client know you appreciate their business and that you enjoy working with them.  Contractors are often not very good at the human aspect of the business, but showing a little gratitude goes a long way and can even lead to future business or referrals.   If this isn't your speciality, fake it until you make it. Trust me, this might be the easiest way to grow  your business.

5. Follow Up, Follow Up, Follow Up

If your client hasn’t paid the invoice after the first week, send a polite but direct follow up.  Perhaps something like:  “Hi Karen, I notice that I have not received your payment for invoice #12345. I just wanted to check in to make sure that you received it and that you are happy with my work.  As always, I appreciate doing business with you."   

6. Make Payment As Easy As Possible

Since most contractors don’t have storefronts, payment can often be clumsy.   Be professional and provide an easy way to for your client to pay quickly.  Accept all major credit cards,  take electronic checks, provide a P.O Box where they can send the invoice.   

Offering to pick up the check at their business often makes contractors look desperate and is usually awkward, so try to avoid in person payment, if possible. 

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Author: The Dashing Accountant

With ten years in public accounting our tax expert is smart, experienced and almost never wrong. In between dominating tax returns, she wins 10-key competitions, drives fast and does math in her head.

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