While many people are quick to complain about tradespeople, and yes, some have less than solid reputations, most tradespeople do an honest and hard day’s work.
What is often not talked about is how customers treat tradespeople.
While tradespeople have been trained in their trade, not all receive training in how to manage difficult customers while running a business.
Many tradespeople were willing to share their stories of customers behaving badly, yet all wanted to remain anonymous. They genuinely felt that complaining about their customers would damage their reputation.
Most of the tradespeople interviewed had tales to tell of customers behaving badly. In one case, the embittered party in a divorce had wrongfully accused the tradesperson of theft, while they were working to ready the former marital home for sale.
Another had a client who turned into a stalker, sometimes leaving up to 15 messages a day, and then threatening “legal action” if the calls were not returned. Yet another had equipment that was left on site stolen. Then the client skipped town, leaving the tradesperson thousands of dollars out of pocket. All had stories of having to chase clients to pay outstanding bills, some for staggeringly large amounts.
All the tradespeople interviewed agreed on one thing: managing the client’s expectations is the key to having a good working relationship.
“Setting expectations up front is vital, and so is trying to predict any potential issues,” explained one. “If there is a potential for something to go wrong that will affect the completion of the job, or the cost, then it should be flagged up front, even if it doesn’t eventuate. ‘No surprises’ is my motto.”
Most tradespeople, regardless of the size of the job, were moving towards providing written, pre-agreed contracts about any work that was so be done, setting out the task and usually an agreed timeframe for the work.
The advantages of having an agreed scope for each job is less stress for both parties, and shorter time frames for payment.
Regardless of your job or industry, if you work, you expect to get paid. Yet not getting paid was the single most common complaint against customers. And businesses are the worst at paying tradespeople: most tradespeople interviewed found that occasionally individual, home-based customers failed to pay, however it was far more common to have to fight for payment from businesses.
“Businesses seem to forget that we are running a business too,” one tradesperson explained. “We have to keep our cash flow going the same as they do, yet some larger companies seem to put off paying invoices for weeks at a time. This seriously affects the cash flow of a small business like mine.”
It is very difficult for tradespeople to get up front payment for work to be done. This is true of any service industry, but whereas, say, an IT Consultant can charge an upfront cost to do the work, tradespeople are often not in the position to this.
Increasingly, tradespeople are using mobile EFTPOS devices to receive payment on the spot from clients. This is particularly helpful if the job has been quoted as a whole, rather than on an hourly, plus materials, basis. The latter requires an invoice and receipts, where as a whole job is a pre-agreed rate. Payment on the spot lessens paperwork and increases cash flow.
What if a business doesn’t pay?
Firstly, a tradesperson can contact the client to discuss payment options. If the client is genuinely having trouble paying then other options should be considered, such as installments over time. It’s better to get some cash flowing in, rather than none at all.
The tradesperson can lodge a small claim against a business for non-payment of an invoice. The tradesperson can self-represent, or have a lawyer present. Small claims are usually for amounts of less than $10,000 but it can vary from state to state.
If this occurs repeatedly with a business, then it is worthwhile speaking to a business lawyer. If you have outstanding invoices, or repeatedly are not being paid by a company, it may be trading while insolvent.
A lawyer can issue a letter to the business requesting immediate payment; else a request to ASIC can be made to investigate if the business is trading while insolvent. This is a dramatic path of action to take. It will probably result in the invoice being paid, but you will also probably irrevocably damage any working relationship with that client.
What if an individual doesn’t pay?
Similarly, mediation, payment plans and the small claims tribunal can all play a role in obtaining outstanding payments from individuals.
Legal action can be warranted, depending on the size of the payment that is owed. Litigation can be long, and expensive.
How to not be a bad client
Discuss, in detail what your expectations are around the scope and timeframe for delivery, so that they are clear and understood.
Listen to the advice provided by the tradesperson: it’s their job and experience that you are paying for.
If you have any issues or concerns with the work, discuss them.
If you are happy with the work, pay invoices in a timely manner.
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