Business Efficiency

Why Collections Are Important

Everyone knows you can’t offer your pest control services for free, or else what would be the point?

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Everyone knows you can’t offer your pest control services for free, or else what would be the point?

It’s no fun to try and collect on unpaid invoices, but you need to have processes in place so that those outstanding invoices won’t disrupt your cash flow. Otherwise, you can’t pay employees, suppliers, or vendors. The best way to protect yourself from unpaid invoices is to prevent the issue in the first place. Here are a few strategies that might help:

Establish A Credit Policy

According to this article, a well-defined credit policy has the following advantages:

  • It sets out clearly how you are going to get new customers, what information you need, and how much credit you are prepared to offer in time and value.

  • It shows customers you care about them enough to explain from the start exactly how you do business.

  • It improves internal communications when everyone knows what they have to do.  Basically, having a written policy ensures consistency, continuity, and streamlines credit decisions.

A well-defined credit policy protects your biggest asset – Accounts Receivable (A/R). It also helps with customer service and retention because there are no “surprises” when further action is necessary. 

Begin Collecting At The Time Of The Sale

Make sure you’re discussing your payment terms and conditions upfront when you sign your customers. For example, clearly communicate when your customers will be billed, when payment is due, and anything else like the preferred method of payment. If you’re using pest control software, you can create a branded customer portal to make it easy for your customers to access their accounts at any time. Make sure you have everything in writing and that your customer has a copy. 

Stay In Touch

Your customers can’t pay until they get an invoice, so the faster you send them one, the quicker you will get paid. Additionally, make sure it’s branded with your logo and has all the correct information on the services you performed. Send your customers a friendly reminder before the invoice is due. With pest control software, you can set reminders to automatically send customized emails, SMS text, or voicemail messages based on a customer’s balance or the number of days a customer is past due.

Technology Is Your Friend 

If you don’t make the process easy for your customers to pay you, then chances are they are going to be late, or they won’t pay at all. For example, I received a paper invoice from my home security provider. Do you want to know how long it sat on my kitchen countertop? Two weeks. Then I moved it to my office, and it sat for another two weeks. Then when I finally got around to opening it, the only option I had was to mail a check. Do you want to know how long it took me to write a check and find a stamp and envelope? If you guessed two weeks, then you guessed right. By the time they received the check and made a deposit, it was probably another two weeks. When you add up all that time, that’s eight weeks with no payment. The moral of the story – if they had emailed me a link so I could pay with my credit card, they would’ve received their payment two months earlier. Additionally, if they had provided me with an option for autopay, this would never have happened in the first place.

Having a well-thought-out plan for delinquencies will help ensure that your past-due accounts don’t affect your cash flow. If you’re still relying on antiquated methods like mailing paper invoices and individually calling your customers when they’re 30/60/90 days past due, then you’re running your pest control business the hard way.

Gab Goncalves
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