Billing customers correctly

This may sound unimportant, but it almost destroyed us in 2001.

It is something that seemed like nothing, but is actually quite hard to do and hit us hard when it went wrong.

Cleaning may look like an easy business, but finding cleaners for each job, cleaners not turning up, customers changing their cleaning hours and requests all the time, cleaners wanting to change their working hours and so on mean that things change a lot and change fast.

It is a hard thing to do as things are coming at the office all the time. So it is also hard on top of this to notarise their hours and get the billing correct.

Things are easy when the company is starting but only once things have fallen apart, did we realise we had to learn how to do this.

We wondered why we were going bankrupt.  After two weeks of serious concerns, the accountant went through our profit and loss statement and noticed that our invoices to clients were not enough more than what we were paying cleaners.

This may all seem obvious, but we have found that cleaning companies often start of well, but then often start to fail as they grow because their systems are not in place.

This is often why cleaning companies fail, a person starts them as they know how to clean, but they fail as they do not know how to run, organise and administrate a business.

 

So we researched how other companies do their billing and what they had learned.

 

1, Mistakes cannot be afforded

Commercial cleaning is a high volume, low margin business.  The average commercial cleaning company makes 2.5% net profit after turnover.  So basically 2.5% profit after all its costs.

Getting the billing wrong by having paid cleaners and then not billing the customer by 2.5% means no profit, more than that means making a loss.

There is no margin for errors.

 

2, Make sure you do not have to remember anything

Cleaning hours and times change a lot, customers change their demands and you will never remember everything that happened in the past as it gets so complicated.

Make sure your systems are perfect so you can rely on them and not have to remember anything.

The more you have to remember the harder things get.

 

3, Double entry leads to mistakes.

When a customer changes their hours, a cleaner does not turn up so you have to reduce their bill for that hour.  Make sure you only have to write it in one place.

The most urgent thing is to sort out the cleaning, so first put it in the cleaner’s schedule.

Then billing is created from the cleaners schedules.  If your billing is not totally aligned with cleaning hours such as price per job, this information is still needed before invoices are created.

This is also how most automated systems work as well.

 

4, Do it now

When a customer changes their billing, make the change in the schedule now, or make a note in you’re to do list which you can cross off once it is done.

Leaving it until later means that things get forgotten, or not always remembered correctly once time has passed.  Please remember point 1 above.

 

5, Get it double checked

A second person needs to double check the bills are correct compared to payroll.  If you bill in advance then this needs to be done later after the payroll has been done.

If the person checking never says there is a mistake, they are pretending to do it, but never are.  They are just signing it off without checking it.  Even in the best accounting practices, bank ledgers for transactions between banks there are mistakes.

If you made a mistake, be open with the client that it came up from double checking.  Reassure them that you do this to ensure there are not mistakes and of course apologise.

 

6, Cleaners will often complain if they are underpaid.

Customers will not complain if they are under billed.

So make sure that you can follow that the invoices are created from cleaner payroll.

So then if the cleaner complains their pay is too low, can tell that the customer invoice was too low.

Also make sure that that the period the cleaner is paid for is the same as the billing period, so can easily check the profit margin between what paid cleaner and billed customer.

Amazingly though only some of your cleaners will see that they have been underpaid, or even check properly, so do not rely on this.

 

In the past before more automated systems, cleaner, plumbers and so on had to bring in their timesheets that they had written.  This was an important tool for customer billing.

It was so important that without it the company could not send out the bills. To ensure staff brought them in on time, they did not get paid on time if their timesheet did not come in on time.  They also would not get paid until they brought it in.

7, Good systems are:

• Transparent
• Simple
• Easy to follow to double check
• Easy to add up to get statistics on e.g. how much profit made from each client

 

 

By the way.

Always make sure to take off a clean from the bill if a clean never happened, that is a massive way to loose customer trust if they notice.  We believe trust is one of your biggest assets for long term customer retention.

 

Software

Once a business gets larger we find it is more economic to use software to mechanise as many processes as possible.  We have found that most specialist cleaning company software works the way we have found works best as put in this article.  You may also find this article also a good way to ensure you choose and set up your software to ensure that it does these things.

Ian Taylor