Green Pro Clean Ltd
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One of the biggest banes of this game is getting paid (quite often)
A big thing that is over looked when it comes to collections is that it actually COSTS YOU MONEY to get paid.
I will be 100% honest, when I get a sizable bill through the door I deal with it, when I get a bill for a few quid I think 'I'll sort that later' So I can't really whinge at clients for thinking the same.
Now before I go on, this is all based on information I have gathered in phone calls to Paypal, GoCardless and my bank manager at Santander.
There is no right way or wrong way to go about getting paid and which ever options you choose for you are entirely your choice and only you can decide what works right for you.
Lets begin with getting paid in cash:
Plus side: It's cash
Negative side: If your client is not home and has not left it out for you then you will need to spend time and fuel to return later to collect the cash. Some time back we calculated that collections was actually costing us 20% of our business in fuel and hourly rates for lads collecting.
Cheques - A bit outdated but still valid:
Plus side: If the customer has no cash they can still pay you on the spot. (Or post it to you should they not be home on the day)
Negative side: You will have to make a trip to the bank to pay it in and await cleared funds.
Paypal (This is a 3 part option) so let's start at the begging:
Paypal Online (through phone tablet or PC)
Plus side: Instant funds
Negative side: The charge for this is currently 3.4% PLUS 20p. Lets use a £15 payment as example :-
3.4% of £15 is 0.51p and then there is the 0.20p charge on top - total to Paypal 0.71p per transaction leaving you £14.29p
PAYPAL HERE:
Using paypal here and just keying in the card details on your smart phone or taking payments over the phone the comissions are the same as online methods.
IMO - That 0.71p is a lot less than it would cost you to return later to collect the cash.
IMPORTANT NOTE -- I am writing this with a regard to the fact that you use Paypal in the spirit it is intended, we all know that if the customer sends payment as 'Gift' or 'Friends and Family' then you don't get hit on the commission - HOWEVER - I personally would not put a note on any receipt asking a customer to help me avoid fees as that speaks volumes about the sort of person you're coming across as.
Paypal Here: - Using Chip and Pin Card reader
Plus side: You can take on the spot payments.
Negative side: You need them home to use the card reader. Commision is 2.75% (there is no 20p charge on top) Example :- A £15 payment. 2,75% of £15 is 0.42p (0.4125p but they will round up) So after 42p cost cost to Paypal you are left with £14.58
Paypal will reduce your percentage to a flat 1.4% across the board should you choose do over £6000 per month business through your paypal account.
GoCardless:
This is a method we are favoring as it does automate much of our administration.
Plus side: Pretty hassle free and payment pretty promptly - Also less likely a customer will cancel on a whim.
Negative side: Like Paypal there is a commission to pay. GoCardless is just 1% commission per transaction HOWEVER there is a minimum charge of 20p but at the other end of the scale there is a maximum charge of £200.
Example of a £15 Payment - At 1% the charge would be 0.15p but due to the minimum charge it is actually 20p (1.39%) Moving the example up however to say a £30 payment the fee is only 1% so hence 0.30p The new minimum does not screw you that badly unless you are doing lots of £5 & £6 jobs.
The maximum charge of £2 in nice if you have a good SFG with a conny perhaps at £250 that means you collect £248 and it only cost you £2 to get your money in.
Admittedly the only clients that are likely to pay large jobs on GoCardless are the existing clients you have set up already on a regular clean.
B.A.C.S.
Plus side: Straight into your bank. - No commission
Negative side: Relying on customers to press a few buttons on their phone,
PAYM:
Plus side: Straight into your bank. - No commission
Negative side: Relying on customers to press a few buttons on their phone,
We have also investigated Android Pay but at present you need an app (as in your own app) to collect this way)
A note on banks - you can use a personal account all you like that's up to you. We use a business account with Santander and pay a monthly standing charge of £7.50 for the first £1000 of cash paid in and then 50p per £100 there after.
You will if starting out be amazed at how much it actually costs you just to walk out of the door in the morning.
No do please note that this post is correct at date of publication and is for your general information purposes only, it is not telling you any right or wrong way to collect your money, just to help inform you of some options out there.
A MOST IMPORTANT NOTE: When it comes to getting paid IT'S YOUR MONEY, YOU EARNED IT - Never be embarrassed or afraid to ask for it,
I hope some of you find some useful information in this.
A big thing that is over looked when it comes to collections is that it actually COSTS YOU MONEY to get paid.
I will be 100% honest, when I get a sizable bill through the door I deal with it, when I get a bill for a few quid I think 'I'll sort that later' So I can't really whinge at clients for thinking the same.
Now before I go on, this is all based on information I have gathered in phone calls to Paypal, GoCardless and my bank manager at Santander.
There is no right way or wrong way to go about getting paid and which ever options you choose for you are entirely your choice and only you can decide what works right for you.
Lets begin with getting paid in cash:
Plus side: It's cash
Negative side: If your client is not home and has not left it out for you then you will need to spend time and fuel to return later to collect the cash. Some time back we calculated that collections was actually costing us 20% of our business in fuel and hourly rates for lads collecting.
Cheques - A bit outdated but still valid:
Plus side: If the customer has no cash they can still pay you on the spot. (Or post it to you should they not be home on the day)
Negative side: You will have to make a trip to the bank to pay it in and await cleared funds.
Paypal (This is a 3 part option) so let's start at the begging:
Paypal Online (through phone tablet or PC)
Plus side: Instant funds
Negative side: The charge for this is currently 3.4% PLUS 20p. Lets use a £15 payment as example :-
3.4% of £15 is 0.51p and then there is the 0.20p charge on top - total to Paypal 0.71p per transaction leaving you £14.29p
PAYPAL HERE:
Using paypal here and just keying in the card details on your smart phone or taking payments over the phone the comissions are the same as online methods.
IMO - That 0.71p is a lot less than it would cost you to return later to collect the cash.
IMPORTANT NOTE -- I am writing this with a regard to the fact that you use Paypal in the spirit it is intended, we all know that if the customer sends payment as 'Gift' or 'Friends and Family' then you don't get hit on the commission - HOWEVER - I personally would not put a note on any receipt asking a customer to help me avoid fees as that speaks volumes about the sort of person you're coming across as.
Paypal Here: - Using Chip and Pin Card reader
Plus side: You can take on the spot payments.
Negative side: You need them home to use the card reader. Commision is 2.75% (there is no 20p charge on top) Example :- A £15 payment. 2,75% of £15 is 0.42p (0.4125p but they will round up) So after 42p cost cost to Paypal you are left with £14.58
Paypal will reduce your percentage to a flat 1.4% across the board should you choose do over £6000 per month business through your paypal account.
GoCardless:
This is a method we are favoring as it does automate much of our administration.
Plus side: Pretty hassle free and payment pretty promptly - Also less likely a customer will cancel on a whim.
Negative side: Like Paypal there is a commission to pay. GoCardless is just 1% commission per transaction HOWEVER there is a minimum charge of 20p but at the other end of the scale there is a maximum charge of £200.
Example of a £15 Payment - At 1% the charge would be 0.15p but due to the minimum charge it is actually 20p (1.39%) Moving the example up however to say a £30 payment the fee is only 1% so hence 0.30p The new minimum does not screw you that badly unless you are doing lots of £5 & £6 jobs.
The maximum charge of £2 in nice if you have a good SFG with a conny perhaps at £250 that means you collect £248 and it only cost you £2 to get your money in.
Admittedly the only clients that are likely to pay large jobs on GoCardless are the existing clients you have set up already on a regular clean.
B.A.C.S.
Plus side: Straight into your bank. - No commission
Negative side: Relying on customers to press a few buttons on their phone,
PAYM:
Plus side: Straight into your bank. - No commission
Negative side: Relying on customers to press a few buttons on their phone,
We have also investigated Android Pay but at present you need an app (as in your own app) to collect this way)
A note on banks - you can use a personal account all you like that's up to you. We use a business account with Santander and pay a monthly standing charge of £7.50 for the first £1000 of cash paid in and then 50p per £100 there after.
You will if starting out be amazed at how much it actually costs you just to walk out of the door in the morning.
No do please note that this post is correct at date of publication and is for your general information purposes only, it is not telling you any right or wrong way to collect your money, just to help inform you of some options out there.
A MOST IMPORTANT NOTE: When it comes to getting paid IT'S YOUR MONEY, YOU EARNED IT - Never be embarrassed or afraid to ask for it,
I hope some of you find some useful information in this.
