Picture a stranger walking up to your counter, opening the register, and leaving with $2,000. You wouldn’t think twice. You’d be on the phone with the police before the door shut behind him.
Now picture a customer who’s owed you that same $2,000 for two months. Different reaction, right? You send a nice email. A while later, a slightly shorter one. Then you wait and hope they get around to it.
The work is finished. The supplies are paid for. Your crew already got their checks. Collecting is the only piece left, and for some reason it’s the piece that makes you squirm.
Here’s the short answer: stop carrying them. Follow the same collections steps every time, and wherever you can, get paid before the work instead of after.
One account, two months behind
This week, Bob runs a commercial cleaning company. His biggest account is an office building that pays $2,400 a month.
The building is two months behind. That’s $4,800 owed. And Bob’s crew is still cleaning it every week.
The $4,800 is only half the story. Bob doesn’t get to wait on the customer before he pays his crew or buys supplies. Say the labor and supplies on this account run about $1,500 a month. Here’s what the last two months look like:
Month 1
Month 2
Total
Billed to the customer
$2,400
$2,400
$4,800
Collected
$0
$0
$0
Paid out for crew and supplies
$1,500
$1,500
$3,000
So Bob isn’t just missing $4,800. He’s $3,000 out of his own pocket on a customer that hasn’t paid him a dime. That money came out of his bank account to clean somebody else’s office.
When this account does pay, it’s supposed to leave Bob $900 a month after crew and supplies. That $900 helps cover his rent, his insurance, and his own paycheck. Right now it leaves him nothing.
You’re not being patient. You’re making a loan.
Most owners in Bob’s spot keep showing up for the same reason. They’re scared that if they push, they’ll lose the account.
Look at what’s actually happening, though. Every week Bob cleans that building without getting paid, he’s lending them money. No interest. No paperwork. No promise he’ll ever get it back.
A bank would never make that loan. They’d want your history, your financials, and a signature before they handed over a dollar. Bob made the loan without anybody even asking for it.
And time works against him. The longer an invoice sits, the harder it gets to collect. The customer gets used to not paying. Their cash goes to whoever is pushing hardest. If they’re having money trouble of their own, Bob is in line behind everyone else they owe. A ninety-day-old invoice isn’t just later than a thirty-day-old one. It’s less likely to get paid at all.
Build a collections plan you follow every time
The fix for most late payments isn’t a stronger email. It’s deciding ahead of time what happens when someone’s late, so you’re not making it up while you’re frustrated.
Here’s a plan that works for most service businesses:
The day after it’s due: a friendly reminder. Plenty of late payments are just forgotten ones.
Two weeks late: a phone call. Not another email. A real conversation with a real person.
Thirty days late: the work stops until they’re caught up.
That last step is the one people skip, and it’s the one that matters most. Without it, the first two steps are just polite suggestions.
A plan also takes the personal part out of it. You’re not mad at anybody. You’re not making a judgment call about whether this customer deserves another week. It’s just how your business works, and it works the same way for everyone.
Tell customers the plan before you ever need it. Put it in your agreement. Nobody should be surprised when the thirty-day step shows up, least of all you.
Better yet, get paid before the work
A collections plan helps you get paid after the work. The better move is to set things up so there’s nothing to collect.
For ongoing work like Bob’s, that means prepaid. The customer pays at the start of the month, and the cleaning happens during it. Nobody is lending anybody anything, and Bob never chases money for a job he already finished.
If that sounds like a hard conversation, it doesn’t have to be. Try this: “Your payment secures your spot on the schedule.” That isn’t a statement about whether you trust them. It’s how your calendar works. Your gym doesn’t let you work out all month and send you a bill later.
For an account that’s already behind, the order matters. Get them caught up first. Then switch them to prepaid going forward. Don’t let a customer who owes you $4,800 start paying up front and leave the old balance sitting there forever.
When prepaid won’t fit, take a deposit
Prepaid works best when the work repeats and the price is set. Some jobs don’t fit that. Big projects, work that runs for weeks, or jobs where the final price might change as you go. That’s where a deposit comes in.
Here’s the rule: if you can get paid in full up front, do that. A deposit is for when you can’t.
There are three times a deposit isn’t optional. The first is when you’re buying materials up front. You shouldn’t be financing their project out of your bank account.
The second is custom work. If they walk away and you can’t sell what you made to anyone else, get paid before you start.
The third is a new customer. You don’t know how they pay yet, and a deposit tells you fast. Someone who balks at paying anything up front is showing you how the final invoice is going to go.
How much should you ask for? At minimum, enough to cover your materials and whatever you’d lose if they walked away halfway through. That’s the floor, not the ceiling.
And whether it’s prepaid or a deposit, put it in writing before the work starts. A payment policy you only explain when someone’s late isn’t a policy. It’s an argument.
Getting paid is the last step of the job
Asking to be paid isn’t asking for a favor. Collecting is part of the job, the same as showing up and doing the work. Until the money’s in the bank, Bob’s job on that building isn’t done.
The longer an invoice sits, the less likely you collect it. Don’t wait to find out how long they’ll let you carry them.
So here’s your one thing for this week. Pull up the list of everyone who owes you, oldest first, and call the one at the top. One call. That’s it.
Want the full conversation? Watch Episode 12 of Planting Seeds: EPISODE 12. And if you haven’t asked yourself whether you’re charging enough, Episode 11 is the one to watch next: Watch Now.