PlumbingBossPro Blog — Running a Plumbing Business

Declined Cards and Past-Due Accounts: Collecting What a Plumbing Business Is Owed

Doing the work is only half the job. Getting paid is the other half. Most plumbing customers pay without a problem, but every company has a handful of declined cards and past-due invoices at any given time. Left alone, those turn into money you never see. Handled with a simple routine, most of them get paid without hard feelings.

Billing the Work Is Step One

Before you can collect, you have to bill everything, which is covered in Stopping Unbilled Service Calls in a Plumbing Business. This article picks up after the invoice is created.

Prevent Problems Up Front

The easiest past-due invoice to collect is the one that never goes past due. A few habits prevent most of them:

• Card on file. Ask for a card at booking for repeat customers and maintenance plans. Customers who sign up from your website sign-up form have their card captured on the form.
• Charge at completion. When the tech taps Complete, the invoice is created and the card on file can be charged before the van leaves.
• Charge on a schedule. For some recurring customers, auto-charge on a set schedule fits better.
• Make paying easy. Customers can see and pay invoices online in the customer app.
• Set expectations. Tell customers at booking how and when they will be billed.

Why Cards Decline

Most declines are not customers trying to avoid paying. Cards expire. Banks replace cards after fraud alerts. A card hits its limit for a few days. The customer often has no idea their card failed.

That is why the first response to a decline should be friendly, not stern. Assume it is a card problem until proven otherwise.

A Simple Weekly Routine

Pick a day each week, such as Friday morning, for collections. Then work through it in order:

1. New declines. Send a short, friendly text: “Hi, this is the plumbing company. The card on file for Tuesday's visit did not go through. You can update it in the app or pay the invoice here.” Customers can update their card in the customer app.
2. Invoices past due a week or two. Past-due follow-up sends reminders. Add a personal text for anyone who has not responded.
3. Invoices past due a month or more. Call. A real conversation clears up most of these. Sometimes the customer disputes part of the work, and the photos and notes on the job help settle it.
4. Long-overdue accounts. Decide whether to keep serving the customer. Many owners stop booking new work until older invoices are paid.

Two-way texting from the office keeps this quick and low-key. Most people answer a text faster than a voicemail.

Property Managers and Restaurants

Commercial accounts set to Monthly billing get one statement each month covering every address, with each line labeled. That makes it easier for them to approve and pay, but it also means a missed statement covers a lot of work.

Watch monthly statements closely. If one is not paid by the usual time, contact the person who approves invoices right away. Know who that is before you need to. A tag or custom field on the client can hold that contact.

Do Not Let It Get Personal

Collections can feel awkward, especially in a small company where the owner knows the customer. Keep it plain and polite. You did the work, the customer agreed to pay, and a reminder is normal business. Most customers appreciate a friendly heads-up about a card problem.

Avoid letting plumbers collect in person unless that is your policy. It puts them in an uncomfortable position and can sour a good relationship. Let the office or the system handle it.

Settle Disputes Quickly

Some unpaid invoices are really disagreements. The customer thinks the repair should have cost less, or believes the problem came back. Do not let these sit. Call, listen and look at the job together: the line items, the notes, the before and after photos. Often a short explanation settles it. When the company did make a mistake, fix it fast. A fair answer today beats a bad review next month.

Watch the Total Every Week

In your weekly review, look at the total of past-due invoices and the number of declined cards. If either keeps growing, something in the routine is slipping. The full weekly review is laid out in The Weekly Reports Every Plumbing Business Owner Should Watch.

Get Paid for Your Work

Card on file, charge at completion, easy online payment and a steady weekly follow-up keep collections from becoming a problem. For more on running a plumbing company that gets paid on time, visit the PlumbingBossPro plumbing business software page.