I once received a request for payment written on the 2x4s of my freshly framed new addition.
My contractor, my wife, and I were doing a walkthrough as he and his crew wrapped up window installation. We were thrilled to see the new part of our home taking shape in the place of our crusty old attic. As we got down to the brass tacks of where we stood financially, our contractor started doing some quick addition with a sharpie on the framing near the door for what would become our master bedroom.
The payment came out to a significant amount of money and although that was expected, I couldn’t shake a sense of nonchalance over my hard-earned benjamins. As you know (maybe too well), clients want clarity and trust in these types of big-ticket transactions.
I didn’t have a ticket, and I had even less trust. Just a 2x4.
How accurate could his off-the-cuff, back-of-the-jamb calculations be? Was this my formal invoice? What exactly was I paying for? I took a picture for my own record-keeping.
It was a good thing I took that picture, because drywall covered the framing the next day. Now it was time to hunt down my checkbook. A few days and conversations later, I left the office on a lunch break and handed my contractor a check in a hardware store parking lot. It was windy that day in the parking lot, and all I could think about was thousands of dollars flying away in the wind by accident. Like many people these days, I didn’t have extra checks.
I’m sure this scenario doesn’t describe your payment collection process. But it does underline a crucial moment that comes multiple times in the build process: collecting project payments. What if there was a way to not just satisfy your client’s questions around what they pay for, but actually create a delightful experience around paying you for your hard work? In my humble experience as “that nitpicking client,” these are the moments that have the potential to cause the most friction or the greatest reward in the client experience. And I don’t have to tell you that a great customer experience eventually turns into referrals for your business. I can tell you with certainty that neither I nor my contractor had a great payment experience that week.
For builders and clients alike, the payment collection process leaves much to be desired, but you can simplify the payment process and build trust with your clients by enabling secure and informed transactions. We’re going to explore three ways to improve this touchpoint with your clients.
Inform with clarity
To state the obvious, successfully collecting payments from your clients ends with money landing in your company’s bank. The first step is informing clients a payment is due by issuing an invoice.
An invoice communicates what your clients are paying for and when they’re paying for it. It may include your team’s time and talent, materials, and trade services rendered. Clearly informing your clients of the details around what the invoice covers is an opportunity to build their trust in your stewardship of their money. If you’re interested in digging into clarity on invoices, we’ve explored the anatomy of the perfect invoice here.
Cut out the roadblocks
The second part of collecting payments is the act of collecting the payment. A well-constructed invoice will go a long way in preemptively answering your client’s questions and therefore cutting out the roadblock of additional time spent on clarifications.
Another way to streamline payments landing in your bank is to make the process of paying easy for your client. Have you ever submitted an online order and thought to yourself, “That was way too easy”? If you could replicate that ease of payment for your clients and increase the security of the transaction, would you take advantage of it? Enabling ACH or credit card payments on invoices is one of the best ways to remove barriers for your clients and yourself to boot. Usage of checks continues to plummet year after year (only three percent of consumers prefer to use checks according to the Federal Reserve of San Francisco as of 2014), and ACH transaction volume continues to grow rapidly, signifying a significant preference for convenience and security.
Keep it consistent
An important part of creating a delightful experience is keeping it consistent with expectations. As a home or remodel is built, it’s important to remember that clients may often be unfamiliar with normal project progress. Consistency in your process of collecting payments can actually provide familiar and grounding milestones to act as touch points along the way. With the trust you’ve earned along the way, clients may even look forward to the prospect of an incoming invoice as a notable update on their project.
And if you find yourself in a position of your clients looking forward to receiving their invoices, you’re well on the way to turning your clients into raving fans of you and your business.