Subcontractors: Get Paid by the End of the Year

It's the holiday season and for construction professionals, that means looking to close your books for the year and enjoy a few days of well-earned rest before the new year begins in earnest. As you start getting your holiday gifts ready for friends and family, remember to give yourself an important gift as well - the gift of getting paid for your hard work in 2017! If you want collect your outstanding invoices by the end of the year, we've got a few tips that will help you in December and put you in a good place to start the new year with a bang.

Get Those Invoices Out

Many businesses effectively shut down for the end of the month as people go on holiday or are in the festive spirit. The sooner you set out invoices, the more likely they are to be paid before the end of the year. Subcontractors who get paid in a timely fashion often follow those invoices up with a phone call or visit to wish the office manager a happy holiday and make sure they've gotten everything turned in so that their payment is processed before the office closes. You should also be sending your invoices electronically (if you aren't already) and, if it makes sense, give the option to pay electronically. When you make it easy to pay you, you'll find collections go up dramatically.

Automate Your Invoicing and Collections Process

If you aren't using software to manage your accounts receivable, look into implementing that now. For even the smallest business, tracking everything electronically makes sending invoices, making payments, and managing taxes a much easier process. Plus, if you make the switch in December, it not only gives you an excuse to call and make sure they got your new invoice (and remind them to pay you before the end of the year), it also means you'll have everything neatly set up for the new year. Some software even logs emails and phone calls made when following up about a bill so you can track high risk clients or see who might pay if you just pick up the phone.

Implement a Late Payment Fee Policy

The first of the year is traditionally when businesses raise their rates based on inflation and implement new billing policies. If you're having trouble with collections, you may want to consider a late payment fee policy in addition to charging interest. Send notices or call you customers to tell them about your new policy and encourage them to pay in a timely fashion. You also want to make sure this policy is reflected in your standard contract and in any subcontracting agreements you make going forward.