There’s nothing more frustrating than a customer who won’t pay a bill on time. It’s inconsiderate at best and financially stifling at worst.
While there’s no sure way to avoid tardy customers, you can take steps to limit the problem. Below are five of the best ways auto trim shops can get paid on time.
1. Ask for full payment up front
In the auto trim business, it’s customary to ask for a down payment – which covers the cost of ordered materials and ensures that a customer comes back for his scheduled appointment.
However, a down payment doesn’t ensure that a customer will ever pay the remainder of his bill in full or on time.
One way to guarantee both is to ask for full payment up front. While some customers may be hesitant to pay for a service that they have not yet received, a discount and satisfaction guarantee can help ease their concerns.
2. Accept multiple payment methods
Times are tough, so it’s understandable that not all customers can afford to pay you in cash. One way to ensure that you get paid on time is to accept multiple methods of payment.
Aside from dollars, consider accepting payments in the form checks, credit cards and direct transfers. The more options you provide, the less likely it is that a customer won’t be able to pay you on time.
Just be sure to take the necessary steps to guard yourself against fraud. For instance, never accept a check from a customer without verifying the address on the check with at least two forms of ID. Also, take down the customer’s driver’s license number for easy tracking.
3. Bill customers routinely
Not all trim shops bill customers or allow them to pay in installments, but some do – especially those that hold contracts with local dealerships or bus companies. If you’re one of these shops, you need to be especially vigilant in ensuring customers pay on time.
It’s important to follow up with customers the moment a bill is due. Letting the issue slide for a few days (or weeks) gives customers the impression that your payment terms are lax and opens the doors to them taking advantage of you.
To avoid this, send paper invoices to customers at the same time each month. This helps establish a consistent payment pattern. It also allows you and customers to track what’s been paid or due. If final notices need to be sent, certified mail is the way to go – especially if you anticipate that legal action may be needed.
4. Enforce your terms
Do you charge extra for customers who leave their cars on your lot for extended periods of time? How about late fees or penalties for checks that bounce? If so, always enforce your terms.
Customers who are subject to extra charges may complain at first, but you can be sure they’ll pay on time the next time around.
Don’t be afraid that enforcing your payment terms will scare customers into competitors’ shops. It’s your right to be paid in full and on time for the services that you provide. Besides, if your work is the best in town, you can guarantee customers will keep coming back.
The ones that don’t were just looking for a free lunch anyway.
5. Consider legal action
Legal action is something that no business owner likes to pursue – but sometimes there’s just no avoiding it.
If a customer refuses to pay for a service that you’ve already provided, file a complaint with the police department. If it’s another business that refuses to pay, also lodge a complaint with your local chamber of commerce.
And, if necessary, don’t be afraid to sue. You may never get your money back; and the cost and aggravation of going to court may out weigh anything you stand to win.
But at least you’ll develop a reputation for being a no-nonsense business – and that can prove invaluable.
We want to hear from you: Got any tips, tricks or advice on how to get customers to pay on time? Tell us in the comments section below.