Customer Payment + Collection Reference

Why this matters

Getting paid is the difference between a profitable business and a bankrupt one. Most customers pay promptly; a few delay, dispute, or refuse. The tech who handles payment professionally + the business that has a collection process protects revenue. This is the field card.

Payment options

Cash:

• Immediate
• No fees
• Customer rare for larger amounts
• Document carefully (receipt)

Check:

• Common, traditional
• Risk of bounced check
• Hold larger checks until clear

Credit / debit card:

• Most common today
• Convenient for customer
• Processing fees (2-3%)
• Built into pricing

ACH / bank transfer:

• Lower fees than cards
• Slower (1-3 days)
• For larger / recurring

Mobile payment (Venmo, Cash App, Zelle):

• Convenient
• Some are personal-use only
• Verify business account

Financing:

• Customer pays over time
• Third-party finance company
• For larger work

Invoice + terms (Net 30):

• Common for commercial
• Customer pays later
• Risk of slow OR non-payment

When to collect

Standard residential:

• Payment at completion
• Card on file (some setups)
• Same-day OR within days

Larger work:

• Deposit upfront
• Progress payments
• Balance at completion
• Per signed contract

Commercial:

• Often invoice + net terms
• Net 30 standard
• Sometimes longer

Property managers:

• Per their schedule (usually net 30)
• May be slower

Deposit policies

For larger work (defined threshold):

• Deposit 25-50%
• Covers your material risk
• Customer commitment
• Some states limit deposit amount (CA: 10% OR $1,000)

Verify state law before requiring large deposits.

At completion

Standard flow:

1. Tech completes work
2. Tech reviews with customer
3. Customer signs work order
4. Payment collected
5. Receipt provided

Don't leave without:

• Signed work order
• Payment OR confirmed terms

When customer can't pay at completion

Sometimes:

• "I forgot my card; mail you a check"
• "My spouse pays the bills"
• "Let me see what insurance covers first"

Options:

• Card on file (taken before work)
• Invoice with payment date
• Partial payment + balance later
• Don't release work without commitment

If customer is established / trusted: more flexibility. If new: less.

Invoice format

For invoices:

• Customer name, address
• Date of service
• Service performed (description)
• Materials used
• Labor charges
• Tax
• Total
• Payment due date
• Payment instructions
• Your business info + license

Professional appearance matters; encourages payment.

Payment terms

Standard:

• Net 30 (most common)
• Due upon receipt
• 2/10 net 30 (2% discount if paid in 10 days)
• COD (cash on delivery)

Commercial often Net 30; residential often immediate.

When customer disputes invoice

Customer claims:

• "You overcharged"
• "You damaged something"
• "Work wasn't done right"
• "I didn't authorize this"

Response:

• Listen
• Acknowledge concern
• Reference signed work order + scope
• Resolve fairly

If valid dispute: correct If invalid: defend with documentation

Late payment

Customer past due:

Day 1 past due:

• Friendly reminder (email / text)
• Sometimes customer forgot

Day 15 past due:

• More direct request
• Phone call OR letter
• Confirm receipt of invoice

Day 30 past due:

• Formal demand letter
• Statement of intent to escalate
• Phone call from manager

Day 60 past due:

• Final demand
• Collections OR legal threat
• Sometimes partial payment negotiated

Day 90+ past due:

• Collections agency
• Small claims court
• Mechanic's lien
• Write-off (last resort)

Each business has policy on timing + tone.

Late fees

Many businesses add:

• Late fee after 30 days (1.5% per month typical)
• Stated on invoice upfront
• Customer knows + may pay to avoid

Check state law on late fee limits.

Mechanic's lien

For unpaid work:

• Lien against property
• Property can't be sold OR refinanced until paid
• Effective leverage
• State-specific notice + filing requirements

Process:

• Notice of intent (varies by state)
• File lien within specified time
• Customer notified
• Often resolved without further action
• If not: foreclosure (rarely needed)

Consult attorney for first lien; subsequent become routine.

Small claims court

For smaller unpaid amounts:

• Limit varies by state ($5,000-$15,000 typical)
• Cheap to file
• No attorney required (often)
• Win = enforceable judgment
• Collecting judgment is separate challenge

Collections agency

For larger / older debt:

• Hire collections agency
• Agency takes 25-50% of collected amount
• Pursues customer
• You don't have to interact
• Customer's credit may be affected

Bad check

Customer's check bounces:

• Notify customer (sometimes accident)
• Bank fee + your fee added
• Cash OR cashier's check next time
• Some states allow criminal pursuit

When customer pays partial

Sometimes:

• "I can pay $X now; rest next month"

Decision:

• Accept (with payment plan in writing)
• Refuse (insist on full)
• Combination (priority items now; rest invoiced)

Document agreement.

Writing off bad debt

Eventually some debts uncollectible:

• Customer disappeared
• Customer bankrupt
• Customer in nursing home / death
• Collection cost > debt

Process:

• Document attempts to collect
• Write off as bad debt expense (accounting)
• Tax deduction (when criteria met)
• Remove from active receivables

Don't pursue forever; cut losses.

Avoiding collection issues

Best prevention:

• Up-front clarity on price
• Signed work order
• Deposit on larger work
• Card on file
• Payment expected at completion
• Customer screening (warning signs)

Warning signs new customer:

• Pushes back on deposit / payment terms
• Asks "how soon will I get billed"
• Has multiple addresses
• Reluctant to provide info
• History of complaints

Specific scenarios

Customer says "send a bill":

• New customer: get card + authorization first
• Established customer: OK if pattern
• Verify address + contact

Customer's check is for less than amount:

• Cashing may waive remainder (state law dependent)
• Don't cash; ask for correct amount
• Document

Customer wants discount after work done:

• Negotiable if relationship
• Document the agreement
• Don't be pressured

Customer's insurance is supposed to pay:

• Customer pays you; gets reimbursed
• OR direct billing to insurance (per arrangement)
• Customer's responsibility ultimately

Property manager slow paying:

• Their problem (their cash flow)
• Standard collections process
• Sometimes property manager pays out-of-pocket

Cash flow management

For business:

• Track receivables
• Aging report monthly
• Follow up systematically
• Don't let receivables accumulate

Long-term debt = significant cash flow issue.

Customer credit checks

References

• State collection law (varies)
• Mechanic's lien statutes (state-specific)
• IRS Publication 535 (Business Expenses, bad debt deduction)
• D&B + Experian Business credit services
• Manuall internal: Service Call Pricing Models, Customer Documentation Discipline