The best way to Improve Cash Flow in Your Cleaning Business

In different business, but especially in a small business, cash flow — money coming in and money going out — is important to the success of the business. Money going out is the easy part; there are always expenses: rent, products, equipment, salaries, etc . that you need to pay out. But sometimes getting money in the future in from your customers can be a slow and time-consuming process.

Most industrial cleaning businesses charge on a month-to-month, after the fact, basis. Special software program as carpet cleaning and window washing may be added on to the monthly bill or charged after completion. Residential cleaners often charge after each cleansing, which can be on a weekly, biweekly or once a month basis.

Customers may be gradual to pay, which will adversely affect your cleaning business’ cash flow. It could imply that you might have to dig into your cash reserves to pay your bills. It may also mean that you have to spend time as an expenses collector making phone calls or perhaps even sending out statements and collection notices to remind customers of past due bills. How do you get your customers to pay on time?

Start by always having an agreed upon contract or proposal.
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Although this seems obvious it is important to discuss payment terms in the contract, with approval by both parties. Make sure that your agreement includes not only when payment is due, but what the penalties are regarding late payment.

Include all related information on your invoices. Invoices should include more than just the cleaning client’s name and services provided. Include when payment is due, late payment fines and a contact name and telephone number for any questions about the invoice.

Would you provide cleaning services to federal government entities or large corporations? Federal government offices and large corporations generally have cut off dates for each invoicing payment cycle. You may have to get your costs in before a certain date or even they won’t pay it until the next payment cycle. For example , you may have to have your invoice in by the 25th or it may sit in somebody’s in-box for another month. Ask the billing agent or accounts payable department when they need your invoice so you receive payment on time.

Distribute your billings promptly. You may perform everything for your cleaning business through marketing to meeting with prospective customers to cleaning buildings. It is easy to place some things off, but don’t allow your billings be one of them. Ensure that you send out your bills at the same time every month, or if your contract indicates that you simply bill right after a service is completed, then send out the invoice immediately.

Numerous cleaning companies require bills to become paid within 30 days (net 30). Perhaps you could offer discounts if the customer pays their invoice earlier. Consider offering a 2% lower price if they pay the invoice within 10 days. Many of your clients will require advantage of the discount.

To keep cash flow coming in sooner, consider shortening your own billing cycles. Instead of having payment due in 30 days, require payment in 15 days (net 15). To prevent any confusion state the specific deadline on your invoices.

Ask for payment forward. Although this is not a typical payment way of a cleaning business, for many other businesses getting payment up-front will be standard. Offer an incentive for your cleaning customers to pay up-front – discounts, preferred cleaning times, or reductions on supply prices.

When signing up a new cleaning customer, ask if they have special billing needs. As with government entities, other cleaning customers might have specific deadlines to process bills. You may have cleaning clients who prefer to be billed mid-month and not the conclusion or first of each month.

Give your clients an alternative of paying by credit card. If you don’t accept credit cards think about setting up an account on the Internet (through PayPal or similar payment system). These companies allow you to invoice your clients by means of e-mail and then they can use their credit card to pay for cleaning services.

Check with your clients regularly to make sure they are satisfied with the cleaning services your business is providing. Clients have been known to keep payment if they are not happy with their program even though they have not told you there is a problem!

Remember, your clients have been in business to make a profit and so are you. Getting paid is how you spend your employees, grow your business and pay your bills. Make sure that your own payment policies are stated in advance, communicate with your clients and provide a great service. Keeping a good incoming cash flow is vital to the stability and growth of your business. Don’t be afraid in order to let your customers know that you expect fast payment for a job well done!

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