Business Genie

How to collect payments faster as a contractor

To collect payments faster as a contractor, send the invoice before you leave the job, accept the payment methods customers already use, follow up on a fixed schedule, and take deposits on larger work. Each step closes part of the gap between finishing and getting paid.

By Business Genie, Mesa, ArizonaPublished Updated

How long a dollar waits after the work

Sample · a fortnight of invoices

As it usually goes: written up at the end of the week, mailed, and paid by check.

As it usually goes35 daysWith the steps
Sample jobs; the timings are illustrative, not measured. Each row runs from the day the work was finished to the day it was paid; the tick is the day the invoice went out, as it usually goes. The average is weighted by amount.

Why contractors get paid late

Contractors usually get paid late because of the process, not the customer. Every one of these can be fixed with a routine, and each is fixed by one of the steps below:

  • The invoice was sent days after the job, or never.1
  • The customer doesn’t have the payment method you accept.2
  • There is no way to pay online, so paying means finding a checkbook and a stamp.2
  • Nobody follows up on overdue invoices.3
  • Nothing happens when one is paid late.3
1

Invoice at the job, not later

Send the invoice before you leave the property. Create it on your phone with the mobile app and send it while you’re still with the customer. They’ve just seen the finished work, so they can ask about a line in person and pay on the spot.

An invoice sent at the end of the week arrives when the job is already a memory. The online invoicing guide covers what the invoice should show.

An invoice with its pay link in the Business Genie app. Names and amounts are sample data.
2

Accept more ways to pay

Accept the method your customer already uses, not only the one you prefer: put every way you take on the same invoice and let the customer pick. See payment options.

On one Business Genie invoice

  • Card
  • Apple Pay
  • PayPal
  • Venmo
  • Cash App

Commercial clients often prefer bank transfer for larger amounts, so ask how they pay before you send the first invoice.

3

Send reminders on a schedule

Unpaid invoices get paid sooner when reminders go out on a fixed schedule, the same one for every invoice, instead of whenever someone remembers. A schedule to start from:

  1. Day 0The day it’s sent: the invoice itself, with the way to pay on it.
  2. Day 3Three days later: a friendly reminder if it’s unpaid.
  3. Day 7A week later: a second reminder, with the payment link again.
  4. Day 14Two weeks later: a firmer note that restates your payment terms.
  5. Day 30A month later: a final notice before late fees or collection.

Apply it to every invoice, with no exceptions, and put the way to pay in every reminder. Anyone who hasn’t replied by two weeks gets a phone call. Business Genie’s automated follow-ups send reminders without anyone having to remember them.

4

Take deposits on larger jobs

For larger jobs, collect a deposit before the work starts, typically a quarter to half of the price. For multi-day jobs, add a progress payment partway through, then bill the balance on completion. The deposit pays for materials before you buy them, and a customer who has put money down has committed to the date.

Write the reason on the proposal, next to the amount: the deposit secures your materials and your place on the schedule. In Business Genie, the deposit goes on the estimate or proposal.

A proposal with a deposit asked up front, in the Business Genie app. Sample data.

Questions about getting paid

How soon should a contractor expect to be paid?

For residential work, aim to be paid on the day of the job or within a few days of it. Late payment is usually a process problem, not a customer problem: invoicing on site, accepting the methods customers use, and sending reminders on a schedule each close part of the gap. Commercial clients often have their own payment cycles, so agree the terms before the work starts.

Should contractors charge late fees?

A late fee the customer agreed to in advance gives them a reason to pay on time. State it on the estimate and on every invoice, keep it within your state’s limits, and apply it consistently. The invoice late fee calculator shows what a fee comes to on a given balance.

What is the best payment method for contractors?

The one your customer already uses. Take several methods on the same invoice and let the customer choose. Business Genie invoices can be paid by card, Apple Pay, PayPal, Venmo or Cash App.

What can I do when a customer refuses to pay?

Send a formal written demand with a final deadline. If that fails, the usual options are small claims court (the limits vary by state), a collections agency (which keeps a share of what it recovers), or a mechanic’s lien for qualifying work on real property, which has strict deadlines. Keep signed estimates, photos and messages; you will need them. Deposits and payment on site leave less of the price at risk in the first place.

The four steps, with Business Genie

  1. 1Invoice from the job, on the web or in the iOS and Android app.
  2. 2Put every way to pay on the invoice, and let the customer pick.
  3. 3Let automated follow-ups send the reminders, on every invoice.
  4. 4Put the deposit on the estimate or proposal.

Free for a month, no credit card to start.

Start free trialInvoicing in Business Genie
Related