Is Your Professional Land Surveying Business Having Troubles Getting Paid?
In business, cash is king. Sure, it’s good to have a sizable and reliable accounts receivable balance, but it’s more important to convert those payment promises (hopefully) into real money in your business checking account.
One of the biggest mistakes small business owners make is not paying enough attention to their cash flow. After all, the faster your professional land surveying business gets paid, the sooner you’ll be able to pay your bills – and PAY YOURSELF!
In this Premium Post I’ll share the three tools I’ve used in my land surveying business to increase my collections and get paid faster. Not already a Premium Member? Then please join our professional community by signing up here »»Premium Signup.
3 Tools to Get Your Professional Land Surveying Business Paid Faster
Tools are great, and in a minute I’ll share with you the tools I’m using to get paid faster, but having a “Getting Paid Sooner Process” is really the first step. So, briefly, let’s discuss a basic process you can build on to manage your collections and accounts receivables. Then, You’ll see where the three tools I’ll share with you “fit” into that process.
Here’s a simple, but effective, strategy to manage getting paid:
- Have a contract, get it in writing. I really shouldn’t have to explain this, but unfortunately I do, as too many owners of land surveying businesses refuse to run as a business. Handshakes are for clients who don’t want to pay you and for certain scope of work disputes.
- Make it easy for customers to pay you. While this sounds like a no-brainer, many business owners overlook this important strategy.
- Get paid more money upfront. This is the quickest way to build your bottom line and increase your cash flow. If you now ask for a 25% down payment, for example, increase it to 50%. This result in an immediate improvement in your cash flow and you’ll also chase less money at the end of the project.
- Bill immediately. The quicker you bill completed work, the quicker you’ll get paid (in theory, at least). A client of mine refuses to work with another professional land surveyor largely because that surveyor’s billing practices drive him crazy. This client got tired of closing out projects only to receive a bill from that land surveyor six months to a year later!
- Get paid when service is complete. If I’ve said this once, I’ve said it a thousand times – YOU’RE NOT IN THE BANKING/LOAN BUSINESS! Clients understand upfront what your services cost (or should), so expect them to pay immediately upon completion of your work. You’re done – it’s your money. You are not prepared or setup to hold loans, you can’t afford to work for free (even for as little as thirty days), and nowhere else could the client find anybody to loan them what your services cost at the terms, or lack thereof, you are providing.
- Follow up on invoices sent. It’s helpful to create a standard operating procedure where you 1. Identify the correct procedure, place, and person to send the invoice to at the start of a project, 2. Bill immediately (see above), 3. Follow up after you send your invoice to confirm receipt and find supposed project problems early on (excuses not to pay you), and 4. Have a standardized collections system when accounts become past due.
The Tools I’m Using To Get Paid Faster
- Making it easy for customers to pay
- Making it easy to get paid upfront
- Making it easy to get paid when completing/delivering the survey
- Making it easy to communicate, and document, the billing cycle
1. Email
Email is a simple, yet effective tool for getting paid faster. The power of email is the power of:
- Communication
- Immediacy
- Documentation
2. PayPal
PayPal, the e-commerce business allowing payments and money transfers through the Internet, bills itself as “the world’s most loved way to pay and get paid” and “Secure Payments – The safer way to pay“. I’ve successfully used PayPal for a few years now.
Clients like PayPal because:
- It’s safe and secure, without having to give any financial information to the store owner or service provider
- They’re use to using PayPal. Over 100 million people use PayPal
- It’s easy for customers to make purchases
- It’s safe and secure, without having to receive any financial information from the customer
- Many clients are already using PayPal. Over 100 million people use PayPal
- It’s easy for customers to make purchases, even if they don’t have, or don’t want to, setup a PayPal account
- Setup is free and easy
- No Merchant Account is necessary or monthly fees
- In addition to using PayPal to handle payments for my online store, I can also send by email for payments
- Payments automatically deposited into my business checking account (see below for caveat)
3. Square Up
Square Up, or Square (squareup.com), allows you to physically accept credit cards, anywhere. You are given a free credit card reader to use with your smartphone, and there’s a free app for your smartphone, too.
I’ve used Square for a year now, and I love it! Let’s say I’m meeting a client to have her sign my agreement and she ask’s if she can pay with a credit card? I pull out my iPhone, plugin the small card reader, swipe the card, enter a few details, and the transaction is done! She gets an email receipt sent immediately, and Square even records where the transaction took place on a map.
Or, say I’m completing a property survey, or delivering a plan, and the client “forgets” his check book. Out comes the Square reader, the client’s credit card, and I get paid.
Clients like Square because:
- It’s safe and secure, without necessarily having to give any financial information to the store owner or service provider (you can manually enter the transaction, and credit card info, but it costs more)
- They can use their credit card directly, without having to sign up for anything
- It’s super easy for customers to make purchases
- It’s safe and secure, without necessarily having to receive any financial information from the customer (you can manually enter the transaction, and credit card info, but it costs a little more)
- It works with my iPhone, which makes me a roving cash register, so to speak
- It’s super easy for customers to make purchases
- Setup is free and easy
- The card reader is free
- The app is free
- No Merchant Account is necessary or monthly fees
- Sends detailed receipt including map location and a picture too
- Next day payout for automatic deposit into my business checking account (see below for caveat)
- It takes away one more excuse for clients not paying you
- Generally, if not manually entering the transaction, Square takes less of a bite from the total sale than does PayPal
- Did I mention that customers think it’s really cool (me too!)
Caveats
- If you are a new business, it’s not as easy to work with PayPal and Square. Customer security is important to both companies, so they require that you are a proven, reliable, and trustworthy company.
- While PayPal and Square are much less expensive than setting up a Merchant Account, do understand what’s their “take” of the transaction. Because the fees for your professional services most likely are significant (compared to a shoe store for example), choosing one solution over another can cost you serious money.
- Automatic deposit to your business checking account may not mean what you think, and requires a few extra, but simple, steps with PayPal and Square. First, both initially place throttles on the money deposited into your business checking account and when. At first, PayPal puts a monthly limit for transfers (I think it’s $500) and Square limits the total to a set amount per week (again, I think it’s $900). However, both allow waivers to these rules with a little verification of your business and some paperwork. For both companies, I found this process simple and easy. Now having verified my company, both automatically deposit the total amounts, regardless of size or total per month/week, into my business checking account (less their fees, of course).
- Square, once setup and verified as mentioned above, initiates the automatic deposit of the total amount (less fees) the next day without any response from you. With PayPal, however, you need to log in and enter how much money you want transferred to your business checking account.
Final Thoughts
A few closing and final thoughts. I know some of you are either uncomfortable, or even dead set against, accepting payments via credit card or through online payments. Having done this myself for a few years now, here are a few trends I’ve noticed:
- The automated emails sent from PayPal and Square build trust and confidence with buyers. They also make great backup documentation for the payments and your projects.
- Even though using credit is shunned in these tough economic times, largely because of the improper and overuse of credit in the past, I’ve seen these transactions in my land surveying business grow to at least 20% of my overall payment receipts. And, it’s growing every year.
- Older consumers (older than 35, let’s say) are more reluctant to use credit to pay for services, unless they get some sort of ‘miles” and “perks” when using credit cards.
- Younger consumers (say less than 35) not only are very comfortable using PayPal and Square, for instance, but almost expect the option. Because these consumers will age, and younger, more tech savvy consumers will enter the marketplace, I think you’ll find an ever-increasing consumer base wanting to use smart phones, online stores, PayPal, and Square to make their purchases. I even wonder if soon, the check becomes a thing of the past.
- Getting paid faster makes my business run better, with less stress.
This Professional Land Surveyor Premium Post by Eric Colburn, PLS, Professional Land Surveyor Adviser & Revivalist.
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