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When you provide a high quality service, there are few things more frustrating than not being paid for all your hard work. This is a problem faced by most businesses that cannot just charge up front for everything they do. The trick is to maintain a good relationship with your customers whilst remaining professional. These are a number of tips for minimising your risk of encountering cash-flow difficulties.
ClarityMake sure all your customers sign a written contract. It should set out exactly what service you provide and what your payment terms are, including any fees you charge for extras, late pick-ups, or missed payments. If you make any changes to your service, ensure you keep your contract updated. Professionally drafted childminder contracts can be bought from Morton Michel via our e-shop, EYP: www.eypdirect.co.uk/childminding-contracts
Even with a written contract, you can still be flexible. You just need to put any special arrangements in writing and keep careful records of who is paying what. Misunderstandings can be avoided much more easily if you can refer back to exactly what has been agreed. It is better to ask for payment in advance to prevent parents not paying after they have used your service. If you do ask for payment in arrears, make this clear in the original contract and in every invoice, so parents don’t get confused when they leave your service and forget to pay their final bill.
ConsistencyPromote good payment habits in your customers. Send invoices on the same day each week or month and in a standard form. Avoid sending informal text messages or emails requesting payment. Schedule regular reminders for when people have not paid on time.
No matter how close your relationship with your customers, avoid doing them special favours as this can put you in an
awkward position later on. If you want to be able to offer flexibility when people genuinely cannot pay, create a policy for handling this and stick to it.
It’s important to insist on sticking to your agreements and avoid letting debt mount up. It often feels more awkward asking for a large sum and you may be tempted to write off some of what you are owed.
CommunicateTake the time to go through your contract with new customers and point out payment terms, including any additional payments. If you need to make changes, including raising your prices, give plenty of notice and make sure all your customers know whatis happening.
Encourage your customers to let you know if they are likely to have problems paying you. If you have a flexible payments policy, tell them about it. If a dispute arises, don’t ignore it, arrange to discuss the problem.
© 2016 Morton Michel Ltd
For enquiries please contact the Childminder department on:
020 8603 0942
www.mortonmichel.com
