As a tradesperson, the last thing you want to do at the end of a busy day is to spend hours chasing your clients for payments. In fact, according to one study, tradespeople in the UK are owed billions of pounds in unpaid or late invoices, which causes significant challenges to sole traders and microbusinesses. Though we can’t chase payments from your clients on your behalf, we can round up some of the best payment methods you should implement…
Credit and debit card
Perhaps one of the most obvious payment methods for tradespeople is to accept credit and debit card payments. Nowadays, card readers are entirely portable, so you can accept them in your customer’s properties with ease. The benefit is that you’ll be paid there and then, but some third-party card machine companies charge a fortune in processing fees; so check!
Online payment platforms
Another method that’s growing in popularity is using online payment platforms, where you can send your customers an itemised breakdown of their bill and allow them to pay via their preferred method, like a credit card, debit card, PayPal, or Apple Pay. The benefit is that you take away some of the manual processing and chasing, but you leave it up to your customer to pay you on time, and you’ll no doubt have to remind them if they don’t pay you on time.
Cash on completion
Cash is another popular method of payment for tradespeople, and the most traditional. One of the benefits of cash is that you can be paid there and then for the job, and if you’re taking payment in advance, you can use some of those funds to pay for any supplies. There are a few drawbacks, however; not only do you run the risk of accepting fake banknotes, but you’ll have to deposit it into your bank and remember the exact amount for accounting purposes.
Escrow services
An increasing number of tradespeople are turning their attention to escrow services, such as the PongoPay tradesmen payments service. Simply put, customers are invoiced for the work in advance, pay using a secure online payment platform, and the money is held in an account until the tradesperson completes the job. Once your customers are happy, the funds will be released – it’s as simple as that. Not only does it give you the reassurance that your client has paid for the work upfront but it allows them peace of mind that you’ll do a good job.
Bank transfers
Finally, standard bank transfers are another payment method to consider, allowing you to ask for the whole amount and receive it in one chunk. The biggest benefit is that you’ll get paid directly to your account, making accounting easier, and you’ll benefit from no transaction fees. The drawback is that some customers find it difficult to set up a new payee and can accidentally input the wrong amount, such as £19.99 rather than £1,999.
What’s your preferred method of payment? Let us know and check back soon for more.
