Invoicing and getting paid

Late payment of bills can be frustrating and can cause tradespeople serious cash flow problems, whatever the size of their business. Here are a few tips which may help ensure the payment and invoicing process runs as smoothly as possible.

Clarity up-front

Make sure that you have a written quote agreed with the customer before you start any job, whatever the trade (tiler, plasterer, joiner) and whatever the size of the job. Whether you are a local handyman or part of a larger limited company here is what you should include in a quote:

• A clear outline of what work is to be carried out - this will help reduce the likelihood of a disagreement over whether the work has been completed properly
• Full price of the job - be clear on whether this includes VAT or not and whether there are likely to be any extras
• Payment arrangements - outline when and how you expect to be paid. Explain to the customer how important it is for you to get paid on time and let them know how you will handle the situation if you don't
• Start and finish dates - this will help clarify when you want the payment by
• If there is some unexpected extra work needed, make sure you agree on these additional costs before you start the work

Getting Paid

You should try to work with your customer when agreeing to how you will be paid. Most customers want to be fair and pay for a good job. You can help by:

• Discussing how the customer would prefer to pay you, for example, cheque, cash
• Don't expect the customer to pay an upfront deposit - it is probably unrealistic unless you are buying a significant amount of materials
• If there are significant expenses for materials you may want to consider asking the customer for a percentage of these as the job progresses
• You may want to consider adding late fees or interest payments to your contract as an incentive for prompt payment by the customer
• You could offer the customer a reduction in the quote if they pay early

If things go wrong

Above all conduct yourself in a professional manner. Contact your customer either face to face or via the telephone to discuss the situation rationallly. Explain the late payment charges that they will face if they continue to delay payment and follow this up with a statement of the account. This should list the original payment amount that is outstanding and the amount of interest accrued.

If the customer still fails to pay you may wish to consider the small claims court. This need not be as daunting as it sounds. A good solution for initiating a legal process in the UK is the use of a solicitor.