How to ask for payment from clients
Sometimes building houses isn’t the hard part of residential construction. Here’s what to do when the most difficult thing is getting paid.
Running your own residential construction business has its perks – you are your own boss, get to choose which projects to pursue, make a big impact on families day in, day out.
But nothing can ruin the fun of running your construction company faster than clients who don’t pay on time. Hung-up capital isn’t just some pesky annoyance you can ignore either. It can keep your crew from getting paid or send a job to a screeching halt.
So, you have the skills to construct a craftsman and build bungalows – but maybe asking for payment is just a little bit awkward? Not to worry. We’ve got five tips to help you get more cash in your pocket more quickly.
How to ask for payments is about to get a whole lot simpler.
1) Stay ahead of payments yourself
The first tip is all about taking the lead. Be the example. If a residential construction team falls behind on invoicing clients, then why should homeowners follow financial deadlines?
Set the standard by either billing clients upfront or sending invoices as soon as possible. You can also ask for a deposit before starting any work. This will give you a good idea of how reliable a client is. If there is an issue with down payments, there will likely be challenges with future invoices.
Get ahead of the payment game from the very start by doing all you can on your end to keep cash flowing.
2) Be persistent
Now you’ve started work, the foundation is laid, things seem to be going along just perfectly … but wait. You haven’t heard from that client, and payment is past due. You sent one email with no response. Is it time to panic?
Of course not! We’ve all been victim to our cluttered inboxes hiding vital information. At this point, it’s important to be persistent. Reach out again then follow up with a phone call. More likely than not, your client is just busy themselves.
Remember: Client relations can make or break a business. While having to persistently follow up is never a pleasant experience, be sure to maintain professionalism—especially since you’re representing your business. When it comes to mastering how to ask for payment, you collect more quickly with polite messages than uncivil ones.
3) Get strategic in payment plans
Since a new home is the biggest purchase most people make in their lives, contractors have to get strategic with payments to deliver their client’s dream.
This goes beyond just allowing homeowners to pay in installments, too. Doing that is a smart move that makes things more financially feasible for clients, but it does nothing to help avoid late payments. In fact, it sets up more opportunity for missed deadlines.
So, what’s a contractor to do? Here are two solutions that many teams employ:
- Offer early payment discounts
- Charge late fees
Line these terms and conditions out in your contract before any work starts to set yourself up for financial success.
4) Simplify client communication with tech
Building a new home is stressful – for both contractors and their clients. That’s why you want to do everything you can to make the building experience more enjoyable.
Enter construction project management software like Buildertrend. Through this industry-leading platform’s Customer Portal feature, clients can view project schedules, see progress pictures, make selections and communicate with their homebuilding team. Now you won’t have to worry about invoice information getting lost in their inbox.
Centralize all that back-and-forth right in one easy-to-use app. But that’s not all the Customer Portal can do …
5) Take advantage of online payments
Clients can make online payments through the Customer Portal, too. Instead of having to wait for checks via snail mail or chase down homeowners, the transfer of funds happens right in Buildertrend.
That level of efficiency means you’re getting paid quicker – much, much quicker. In fact, according to Buildertrend’s proprietary data, teams that use Payment Processing collect 16 days faster compared to those who don’t. Here’s how it happens:
- Contractors send digital invoices or change orders.
- Clients make the payment via the Customer Portal.
- Payment Processing syncs with QuickBooks, so it’s quick to assess where a project stands financially.
It’s as easy as 1, 2, 3.
Don’t miss payments from clients. Get tech on your side
Mastering how to ask for payments is no easy feat … especially when the clients are missing deadlines and falling past due.
However, there are business strategies you can employ to avoid payment pitfalls. Getting construction project management software is one of the most effective. We’ll show you how. Schedule a Buildertrend demo today.
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