GoCleanup.com

Cash flow (the money coming in and money going out) is important to the success of any business. When we look at the money going out, that is the expenses and what you need to pay, it’s fairly straightforward – wages, supplies, equipment, bills, etc.  It’s the money coming in that can be the tricky part because getting paid from your clients can sometimes be a slow and time-consuming process.

Commercial cleaning businesses generally charge on a fortnightly or monthly basis.  Once-off services like carpet cleaning or window washing are added to the regular fortnightly/monthly invoice or charged separately after the job has been completed.

If clients are behind in payments, this will adversely affect the cash flow of your cleaning business.  You may have to use your own cash reserves to pay bills, or worse still, you may have to act as a bill collector making phone calls or sending out statements and collection notices to remind customers of overdue accounts.

So, how do you get your customers to pay on time?

The initial and most important step is to have a signed service agreement with the client.  This may seem like an obvious step but you’ll be surprised how many business owners neglect this part.  It is imperative you set out the payment terms in the agreement and have both parties sign it in order to legalise the sale.   Ensure the agreement includes not only when payment is due, but what the penalties are for late payment.

Set up your invoices to include all the relevant information – client’s name, services provided, when payment is due (to avoid any confusion state the specific due date on your invoices), late payment penalties and contact details should the client have any questions about the invoice.

Some larger corporations have cut off dates for each billing payment cycle which means you may have to get your invoice in before a certain date or you won’t be paid until the next payment cycle.  For each client, check with the accounts payable department on when they need your invoice so you make sure you receive payment on time.  Check with a new client if they have any special billing needs.   Some clients may prefer to be invoiced mid-month and not the end or first of each month.

Send out your invoices on time!   You may be rushed for time so it’s easy to put things on the back burner but don’t let your accounts and invoicing be one of those things.  Make a set time each fortnight/month to send out your invoices (depending on the payment terms) or if your agreement states that you bill right after a once-off service is completed, then send out the invoice immediately.

Make sure payment is not being held back because a client is not happy with their cleaning service.  If your operations department are effectively managing client relationships, they will know if there have been any problems of late.  You should regularly check with your clients to make sure they are satisfied with the cleaning services your company is providing.

Like yourself, your clients are in business to make a profit.  Receiving payment from services performed is how you pay your employees, expenses and grow your business.  Be sure both parties are aware of the payment policies from the start and maintain good communication with your clients while performing a quality service.  The stability and growth of your business depends on keeping a good incoming cash flow so don’t be afraid to let your customers know you expect timely payment for a job well done!

Managing the Finances of your Cleaning Business - Learn to do More with Less

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