What do you do when customers don’t pay? You’re there to do house cleaning, not bill collections. Do you charge late fees for late payment or worse, no pay? And do you keep cleaning when customers don’t pay and just send them an invoice?
On your walkthrough, there needs to be an agreement of payment terms. Deposit upfront for move in-move outs. Cash on demand (C.O.D.) or a credit card on file for all customers. And clarify you’re not a bill collector when you give the bid or the job estimate. Theft of services is a real bugaboo. No pay, no cleaning.
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Watch: When Customers Don’t Pay
You Have to Get Paid
Today, we’re discussing what to do about customers that don’t pay. This is a tough question but it keeps coming up in all the different community groups and training. It is a problem. Some house cleaners don’t understand that making money is the focus of this business. So, if money is not collected, there is no job.
Talk About Payment from the Beginning
When you go to a customer’s house, you can be fun and likable and charming. But you have to have a conversation with the customer on the first walkthrough about payment. It is important to set your boundaries early.
If you do not get paid, you’re out of business. You may even have to say goodbye to that customer and find a new one.
That brings a lot of expenses. You also have to do the walkthrough again and build new relationships, so it wastes time.
It’s easier to say to an existing customer, “Listen, I am not a bill collector. I am a house cleaner and I’m here to do an amazing job at your house. But, here’s the catch. If I don’t eat, then I can’t clean because I have no energy so I must get paid for the job that I do.” The customers laugh and they go, “Yeah, that’s funny. Okay, cool.”
Be Clear in Your Expectations
If you accept checks, say, “When I come to your house, there must be a check on the cupboard for this amount of money. That way I can eat, and I can do the job that you deserve.” They go, “Okay, great, that’s fair.”
Tell them you are not a bill collector and you will not chase them down for money. Make it clear that if you come to clean their house and there is no check, you will leave. There is no cleaning until you get paid. And that customer’s like, “Okay, I get it.”
Plan for Surprises When Customers Don’t Pay
“If something happens and you forget to pay me, I’ll text you to say there’s no money. In that case, you can send the money via PayPal through your smartphone.”
Include your email on the checklist you leave for the customer. This way they know how to find you on PayPal. As soon as you get the money, their house gets cleaned.
Working for free is not an option, and you’re not a collection agency. There is no time to go after them for money, and you won’t hire a bill collection company. They hired you and you accepted the job. In exchange for your services, they need to pay you.
House Cleaning Payments are COD
This is a cash on demand, COD, business. That means you do the job, and they give you the money. It’s at the time of service.
These are not 30, 60, 90-day terms. In commercial cleaning, which is different from house cleaning, there are different terms for bill collecting.
So, you’d have to figure out how you’re going to eat during those 90 days when a customer is slow to pay.
You still have employees that you have to pay for. There are vehicle expenses and insurance. There’s bonding, supplies, uniforms, and other overhead. Also, you have a bunch of stuff that you have to pay for even if you’re waiting 90 days for payment.
If your commercial accounts don’t pay, then you do have to hire a collection agency. The easiest way to get paid is to get your money upfront.
Technology Can Help When Customers Don’t Pay
There are lots of software programs and resources to help you price a house cleaning. You can add one to your website.
A customer can go on and create their own estimate with a list of the rooms they want you to clean in their house. A price pops up and it says this is how much it’s going to cost, and then they enter their credit card information. Then you know you’ve already been paid and you can go on and clean the job.
If the customer is not satisfied, you can hit the refund button and give their money back, or you go back and re-clean. Either way, you’ve already collected the money upfront.
You Can Also Keep Their Credit Card on File
You can also tell them, “I get the money upfront and I will hold your credit card on file. When I text you the confirmation the day before, I will text you the amount of the cleaning.”
Or you can do it after you finish the job. You can say you already have the credit card on file so you’re going to charge it. Send the customer before and after pictures.
There’s also software that allows you to upload your before and after pictures. Show them the job is complete. Then, give them the total price for what you charged on their credit card, and thank them for their business.
Discuss Changes in Price or Needs Before You Start
If the price changes, which is not recommended, discuss that up front. Agree to something that the customers can budget and something that you can budget.
That way you know how much you’re getting paid, and they know how much to pay you.
Then, if you go into a house and there’s a whole bunch of other things going on, send a quick text.
You can say, “There’s a lot going on here. What are the priorities today? I may not be able to get to everything based on my time here and the time you’re paying me to clean your house.”
Communication is the Key to Getting Paid
You have to have those conversations. As long as you keep the customer in the loop, they won’t run off with your money. It’s not that customers don’t want to pay you.
Sometimes they don’t know how much they’re supposed to pay you. Be clear about what you charge and agree to the money owed/paid before you start the work. You have to eat, right?
No one can plan their budget if they don’t know what to expect. It’s great if everybody is on the same page, so you can budget based on what you know you’re going to get paid. The customer can write you a check in advance. Everyone knows exactly what to expect.
Different Circumstances Call for a Different Approach
Move-in and move-out cleanings are a little different. The rules change for those. The recommendation is that you get the money upfront and charge a 50% deposit.
You might have a move-in cleaning where a customer is going to be moving in. So, you go in and you clean the whole place and make it magnificent. Then, the deal falls through and the customer doesn’t buy the house or they don’t move in. They leave you stranded with the cleaning.
Or they move-out and just leave town and you never see the money. You just spent 9 or 12 or 16 hours doing a fantastic move out clean that you’re never going to get paid for.
Deposits are Great Insurance
For a move in move out clean not only do you get the money upfront but you charge a deposit. There may be a $600 deposit for this move out clean. Now the quoted price based on the time that you have allocated might only be $320. You can hold $600 until you finish the job. Then, you can refund the difference.
If it goes a little bit over, or if you find there are things that you didn’t know about, you have to add that into the price. Maybe there’s mold behind some furniture or things you don’t see during the walkthrough.
Communicate the New Price Before You Do the Work
Before you add it on to the price, you need to text the customer. Say, “Hey, by the way, when the movers got everything out, we realized there’s mold. It goes all the way around to the inside of that room that was flooded. You replaced the carpets but the walls were not fixed. So, there’s a bunch of mold that we have to remove. It’s going to be an extra $200,” or whatever your price is.
“I just wanted to give you a heads up. Do you still want us to do that?” And if they say no, keep it to the original $320. Then you will refund everything and you will leave the mold. They can hire a remediation company to come in and remove the mold.
Account for the Unexpected
There are things like that that can happen. You have to keep the customers in the loop. I don’t think people want to rip you off and end up in court, but there are a lot of reasons customers don’t pay.
Sometimes it is financial and people get in a bind. If somebody didn’t pay last week, but they still expect you to come this week, you need to adjust your terms. Say, “Listen, you didn’t pay me for last time. That automatically drops you off my list, and now new customers are free to hire me.”
They may respond with something like, “No, no, no, no, no, I really want you. I just screwed up. I didn’t transfer the money from my bank account,” or, “I ran out of money,” or, “I got fired from my job,” or whatever. Things will happen.
Negotiate on Your Terms
Then you may want to negotiate on a case by case basis. “Okay, so here’s what happens. I charge $200 for today’s cleaning. And you can pay me an extra $50 for the next four cleanings to make up for the unpaid cleaning.”
Don’t train your customers to get in the habit of splitting up payments.
You are not a Bank
It is not your responsibility to finance them. But make it clear that they want your business then you need to eat and pay your bills, so you must be paid.
You can remind the customer that you do have bills to pay. They are your income, and cleaning their home is how you make your money. So, you can’t give everybody a free pass, and you can’t finance people. You might do it one time per customer.
Do not get in the habit of doing that on a regular basis, but you might work with them once to keep their business.
Now You Know
That is what you do when a customer doesn’t pay. Take full responsibility and know your rights. Change your program so that you never again forget to clarify charges and payment during the first walkthrough. If you don’t get paid, I’m sorry but you’re out of business.
How to Collect the Money People Owe You: A Complete Step-By-Step Credit and Collections Guide for Small Businesses and Individuals – https://amzn.to/2Q9rBOJ
How to Win in Small Claims Court and Collect – https://amzn.to/2M77Kwc
Collect Your Money: A Guide to Collecting Outstanding Accounts Receivable for Your Business – https://amzn.to/2wTC9bB
Boundaries for Leaders: Take Charge of Your Business, Your Team, and Your Life – https://amzn.to/2M8vz6T
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