Protecting your plumbing business from any financial downturn has to become a priority if you are a small plumbing business today.

There are a number of ways to do this and if you are to survive, you will need to implement some of these suggestions early. The earlier you install and prepare your plumbing business, the better you will survive it.

Without ranting too much about the shortcomings of our western Governments and their addiction to corporate capitalism, as a small business owner/operator, there are some things that you can implement in your plumbing business early that can act as a ‘buffer’ against some of the looming cash flow problems.

Every plumber loves a “cashie”. So what is a “cashie”? A ‘cashie’ is a cash job. That is, they get a callout to a job and the customer pays them in cash money.  Cash is not the usual payment method these days as the majority of jobs are done on a credit card or for good or frequent customers, it is an invoice.

A good Reason to avoid invoicing customers:

Invoicing clients means that it costs you a bookkeeper’s wages or your own time to do up the books every month. When a customer insists on an invoice but doesn’t pay you for three months, this is costing you a great deal of money not to mention time and postage stamps.  If you used that outstanding money in your own bank account, you could be earning interest on it.

So now (I hope) you have realised that you are a plumbing business and not a banking business you will realize that if you continue to allow your customers to have outstanding accounts that they are using your money to do their repairs and maintenance.

If you absolutely, positively have to invoice a customer, please use online systems that allow you to send the invoice by email. At least this way you won’t have to pay for the postage costs which in Australia is $0.55 cents per letter, mounts up really fast. Snail-mail is fast becoming prohibitively expensive and is one cost that can very easily be cut-out.

Be Careful with Credit Card Customers

Credit card payments seem to be a common payment option but even this costs your plumbing business money as you have to pay the charges. I can only hope that you have built in these charges into your pricing structure.  Bank charges mount up over a twelve month period as you no doubt have noticed by reading through your balance sheet every month.  Still, they are a more profitable payment method to invoicing.

A simple and Affordable Payment System for every Plumbing Business:

There is no way around avoiding paperwork unless it is a “cashie” and not recoding that anywhere is an offence under Australia’s GST laws and not one that we recommend.

The alternative is the simplest, most cost effective way of getting paid. Give clients your BSB and bank account details for them to do a direct transfer.  When you write up your bill at the end of a job, and they ask for an invoice, get them to sign the invoice with your payment details clearly written along with the terms of payment. Ask them to deposit the money directly into your back account within 7 days. As they have signed the invoice you have proof of service so that if they want to turn nasty and refuse to pay, you have a signature on a signed agreement to pay.  It’s always necessary to have all the ‘I’s dotted and‘t’s crossed.

Direct deposit saves your plumbing business money, time and is a great convenience to you and your customer. This is one way to protect your plumbing business from financial crises.

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