Get Paid First—Before You Clean

Cash flow is the lifeblood of your business. Setting up and maintaining a strong payment system supplies your business with the cash flow it needs grow and thrive.

Without a regular flow of cash into your business, money for business expenses, taxes and the self-employed owner (that would be you) can slow to a dribble.

You can’t pay your bills with dribbles of cash, promises and IOU’s.

Hard Payment Lessons

I learned this lesson the hard way. Before I cleaned houses, I owned a corporate gift basket business.

The most crazy making part about that business was getting paid.

Even though that business had a merchant account and accepted credit card payments, many corporate customers insisted on purchase orders with Net 30 terms (meaning they had thirty days from the invoice date to make payment).

Customers were often late with payments. Thirty days stretched into forty-five or sixty days.

I tried not to make collections calls before thirty-five days (just in case the check was in the mail).

When I called, my company contacts often handed me off to the accounts payable department.

The Accounts Payable Game

From that department, I heard a variety of excuses and dodges, including:

In one attempt to speed up the payment cycle, I offered a 5 percent discount for early payment.

After that, some customers paid me on the 29th day and took the discount.

One past due customer gave me weeks of excuses during repeated collection calls.

One morning, I literally planted myself in their office reception area.

I asked to speak to my company contact person. When she came to the reception area, I told her I would remain in their office until I got paid.

I sat there 4 hours. I finally got paid in full by check.

I went to that customer’s bank branch to cash the check that same day to make sure I received full payment.

I wasn’t taking any chances.

New Policy

When I decided to make a career switch, I knew I would concentrate on residential cleaning and there would be no payment delays.

No prepay, no clean was my very first policy.

It is the first item on the Customer Agreement all new customers sign.

I make sure new customers are very clear about my policies. Especially the one about paying before cleaning.

Add A Trip Fee

In the beginning, if payment was not present, I would leave a “notice to reschedule due to non-payment” card on the kitchen counter and leave.

Then I would call the customer later that day to reschedule their appointment.

A few years later, I added a trip fee of 50% of the cleaning fee if payment was not present.

The trip fee helped cover the time, effort and gas needed just to get to the customer’s door.

Customers have to pay the trip fee (plus their regular cleaning fee) before I will clean again.

Clear Policies Make A Difference

A clear cut off point is important because when collections go on too long, payment amounts can snowball.

If payment amounts get too large, customers may never pay what they owe.

Avoid “just this once” excuses and don’t fold if your customers get angry.

If you have a clear payment policy and follow a regular practice of calling a day before to remind your customers, you have given them adequate notice.

However, they may forget even with your reminder. The trip fee reminds them with consequences.

I’ve found customers who pay the trip fee once never forget to prepay again.

The Courtesy Call

Over the phone, she gave me directions to her family’s cash drawer and told me to pull the payment from their private cash stash.

Thanks to that phone call, I got paid and her home was cleaned on schedule.

Problem solved for both of us.

Get Out In Front With Monthly Billing

To move from playing catch up to getting out in front of cash flow issues, you will have to re-work your payment and collections policies.

The first policy change is to no longer accept checks or cash.

If you have a website, add a secure page to your site where you can safely accept online payments.

There are a lot of payment choices for house cleaners, from Stripe and PayPal to automated systems you can run from a smartphone.

Yes, you will have to pay 2 to 3 percent to the payment processor, but you will gain time and peace of mind in return.

Plus you can fold an extra 5 percent into your prices to cover the added expense of paying a payment processor.

Automated Payments

With that system set up, the customer will get an automated receipt for the payment each month when their card is charged.

Your payment processor will send you an automatic notification about the payment.

It is also possible to automate entries into your bookkeeping or accounting software when payments are made.

An Automated Payment Process Would Look Like This:

Your customer, Sandi Harris, is set up on recurring billing. On the first of each month, a lump sum payment covering the price for all of the cleaning for the coming month is charged to her credit card.

Sandi automatically gets a full receipt for the charge by email. At the same time, your business is notified about the payment by email.

Since you set up automated entries of payments into your bookkeeping software, you also get notified of the payment entry.   

Those are four automatic payment tasks—and you did not have to call or chase the customer down at all.

Make The Change In Your Mindset

(Audio) Tips To Get Started With Monthly Billing

In this podcast interview, Mike Campion of Grow My Cleaning Company gave tips to business owner, Michael Guerra on why and how to start monthly recurring billing with his customers.

Click or tap the audio player to hear the entire interview.

In the podcast, they discussed:

Do Your Homework

If you decide to make this leap, be sure to do your homework. Read, research and read some more.

Learn everything you can about accepting credit cards.

Learn about the risks and rewards that come with recurring billing. Be clear about how to protect your business from fraud.

Plan the change To Recurring Billing

Set a monthly recurring price that covers the average amount for cleaning a bi-weekly customer’s home. 

The monthly recurring price should be the same each month. 

Be sure to cover the costs of accepting credit, debit and charge cards like American Express in the monthly price. 

Plan And Write Out Your Policies

How you will handle any errors or complaints about monthly charges? 

Have a plan to cover what happens if their card is declined or if they dispute charges because they are unhappy with your cleaning that month. 

Be sure to include policies that cover what happens if you get sick or plan to take time off that month. What happens then?

Think those situations through and come up with policies to handle foreseeable problems with the billing system.

Set up the monthly recurring billing system

Set up automatic receipts to your customers once charges are made.

Don’t forget automated notifications to your customers before their cards are charged.

Make sure you get notifications when your customer’s monthly amounts are paid.

Notify Your Customers Of The Change

You will need to send a letter to your customers telling them you are changing to a different billing system.

You will also need to update your Service Agreement notifying customers about the change to payment by credit cards only and recurring monthly billing.

Follow up that letter with an in-person visit or by phone to answer any last-minute questions.

Get Signed Credit Card Authorizations From Customers

Depending on the payment processor you choose, you may need to get a signed credit card authorization form from your customers. Your form should include a clear cancellation policy.

Decide On A Start Date For The New System

When will you start the monthly billing system?

You can set up recurring billing with all new customers to test and refine the system.

Then make the change to your new billing system with your existing customers with a notice of two months.

What Healthy Cash Flow Feels Like For You

If you have been chasing customer payments for your cleaning service, consider making a change to some form of prepayment.

Whether the change is to getting paid just before each cleaning or making the leap to monthly recurring billing, create a cash flow system that fuels your business growth.

A payment system that ensures you are paid for your work.

A payment system that washes away the drama and stress of collecting money from customers after you have cleaned their homes.

A payment system that helps you invest more time and energy into your cleaning business.

Getting Paid On Time Improves Your Relationship With Your Customer

You may also find your relationships with your customers improve.

People tend to treat you better when you set boundaries and limits in your working relationships.

Paying you on time, without any drama should happen all of the time.

Payment systems make that happen.