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Happy Tuesday Folks!
Welcome back to another edition of The Contractor Finance Playbook.
I’m switching things up this week and trying out a new format this week. Let me know your thoughts if you like this new format or if you liked the previous one better. Let me know your thoughts, I’m always open to feedback.
Were getting close to crunch time in Q4 and every dollar counts. Today, I’m giving you five tips that will help you get cash in the door faster. Plus I’m debuting a new section call: My 2 Cents, where I give my honest thoughts on a topic that’s relative to contractors.
Now, let’s dive on in!
Deep dive: 5 Tips to Get Paid Faster
5 Tips to Get Paid Faster
There are a lot of things as a contractor you can’t control: diesel prices, subcontractors and employees showing up on time or when they said they would, or even permit and inspection timelines, to name a few.
But one thing you can moderately control is how fast you get paid once a job is completed.
Here are 5 tips you can implement to help get you paid faster:
1. Make it easy for customers to pay
How many times have you gotten a bill in the mail and there is no way to pay it online? Or you don’t have the cash or the checkbook on you so you pull out your card only to be told: “Sorry, we don’t accept credit cards”
It can be annoying, right? That’s what you’re doing to your customers when you don’t offer multiple payment methods.
Offer ACH, credit and debit cards, and a simple pay link right on the invoice. If you already have an account with a payment processor, you can take payments through your phone or even on a card reader so you can collect those payments while you’re still on the jobsite.
Yes, credit card fees are a pain but you collect immediately, and it beats waiting for a check in the mail.
I’m not saying you should stop accepting checks, but it’s always nice to provide different options, and it provides a better overall customer experience when they can pay their preferred way.
2. Take payments on the spot when you can or invoice same day
For service calls and smaller jobs like in HVAC repair, plumbing, electrical, etc., collect before you leave. Taking a check or having a card reader or tap to pay link on your phone means you collect the money immediately and don’t have any outstanding invoices to worry about later.
If it’s a larger job or you aren’t able to collect on the spot, send the invoice while you are on the jobsite or soon thereafter. Business management apps like Jobber make this insanely easy, as invoices can be created with just the press of a button.
3. Take a deposit upfront before you start or on day 1
This one varies based on the trade, but take a deposit upfront before you start. I recommend 10%, but up to 30% is common depending on the job and the trade. This will help cover your upfront materials and can help filter out the tire kickers.
Some states like California cap deposits for home improvement work so check your local rules.
4. Bill in milestones for larger jobs
For larger jobs you can bill in milestones and tie payments to the completion of those milestones. The customer’s money helps fund the project instead of you fronting everything upfront and hoping they pay you at the end.
5. Have a formal and documented follow-up process for past due invoices
I break this down in much more detail in the AR Follow-Up Guide. Get the free guide below:
I break this down in much more detail in the AR Follow-Up Guide. Get the free guide below:
My Two Cents: Run your own race
My 2 Cents: Run Your Own Race
This is a topic that’s been on my mind lately and I think it’s important that we all as contractors and business owners stay grounded and run your own race.
What do I mean by this?
Focus on your own business and self, and stop comparing yourself to others.
Quick story.
My first job out of college I worked at a software company making $16/hour with the opportunity to get a 25 cent per hour raise if I met certain metrics for three months in a row (I know..great gig right!?).
At the time I thought it was great. While I wasn’t making as much as many of my former classmates, I was able to put a lot of money away in savings and investments.
But as I kept up with my colleagues I noticed they were getting promotions and big raises with what seemed like half the effort that I was putting in.
One of my good friends bought a brand new F-150 and from the first moment I rode in it I decided I wanted a full size truck like it.
One year later I took most of the money I had put back in savings and purchased a 2015 Silverado that had 45 miles on it as I drove off the lot. I felt like I had earned it and it helped me feel like I wasn’t falling behind.
Was it a great financial investment? Absolutely not.
And if I just had the patience of waiting another year, it would have been a lot better of a deal. But I made that decision with the thought process of, I work hard and I want to be like them.
The Point: The same thing can happen to contractors. You see a buddy pull up with a brand-new piece of equipment, and suddenly you want one too. Or you hear that another company hit the revenue number you’ve been chasing.
If this is you, I want to simply offer you encouragement and you’ve got this! Everyone is running their own race and everyone’s timing is different.
Keep running your own race and don’t let others dictate and influence you into making bad decisions.
I’ll leave you with a quote from the great college football coach Nick Saban.
"You have to be able to stay focused on executing on the field and not get involved in all the hype outside the game. Win your individual battle, win the one-on-one battles, execute and do your job together, as a group gives you the best shot to be successful in games like this."
Question of the Week
What is one thing you are doing or habit you are building to help make sure you achieve your goals in 2026?
Want More?
Shoot me an email at [email protected] if you have any questions or requests for topics you would like me to write about. I’m all ears and I respond to all emails personally.
’Til next time, cheers!
Preston