Billing is a crucial aspect of running a successful pooper scooper business. At Swoop Scoop, we have developed a streamlined billing process that ensures consistent cash flow and weeds out bad customers. Here’s how you can adopt similar practices to optimize your billing system and grow your business effectively.
Pre-Pay vs Post Pay Billing Methods
Pre-Pay Billing
Advantages:
- Guaranteed Cash Flow: With pre-pay billing, you receive payment at the beginning of the service period. This ensures a steady cash flow, allowing you to cover operational costs and invest in business growth. It’s like getting a 30 day interest free loan from customers.
- Reduced Risk of Non-Payment: Since customers pay in advance, the risk of unpaid invoices is minimized. This helps maintain a healthy revenue stream and reduces administrative headaches.
- Better Customer Screening: Pre-pay billing helps weed out unreliable customers. If a customer fails to pay, their service is paused, quickly identifying those who are not financially committed.
- Operational Efficiency: Knowing you have secured payment allows you to plan and allocate resources more effectively. You can focus on service delivery rather than chasing payments.
Disadvantages:
- Customer Resistance: Some customers may be hesitant to pay upfront, especially if they are new to your business and unsure of your service quality.
- Administrative Setup: Setting up a pre-pay system requires a robust CRM that can handle recurring payments and notify you of any issues with customer billing.
Post-Pay Billing
Advantages:
- Customer Convenience: Post-pay billing is often more convenient for customers, as they pay after the service has been delivered. This can enhance customer satisfaction and trust.
- Attracts New Customers: New customers might be more willing to try your service if they don’t have to pay upfront, making it easier to acquire new clients.
- Flexibility: Post-pay billing offers flexibility in handling billing disputes and adjustments. If a customer is unhappy with a service, it’s easier to address the issue before processing payment.
Disadvantages:
- Cash Flow Uncertainty: With post-pay billing, you might experience delays in receiving payments, which can create cash flow challenges, especially if you have high operational costs.
- Higher Risk of Non-Payment: There is a greater risk that some customers will delay payment or not pay at all, leading to potential revenue loss and increased administrative efforts to follow up on unpaid invoices.
- Increased Administrative Burden: Post-pay systems require more effort to manage, including sending invoices, tracking payments, and following up on late payments. This can consume valuable time and resources.
We Choose Pre-Pay Every Time.
Why Pre-Pay? All our recurring customers pre-pay for the entire month on the 1st. This practice offers several advantages:
- Guaranteed Cash Flow: Pre-billing customers is like getting a 30-day cash advance, providing you with the funds needed to grow your business.
- Bad Customer Filter: Customers who don’t pay on time are immediately paused and eventually weeded out, ensuring you only serve reliable clients.
Requirements
- Card on File: All customers are required to have a card on file. This simplifies the billing process and ensures timely payments.
- Strict Policy: If a customer misses a payment, we pause their service until the bill is settled. Even if they miss a week, they are still charged for the full month.
By maintaining these strict billing policies, you create a reliable revenue stream and minimize the risk of unpaid services.
One-Time and Initial Cleanup Billing
For one-time or initial cleanups, we also require a card on file. Here’s how we handle these services:
- Flat Rate Pricing: We price these cleanups with a flat rate, charging the customer’s card for the full amount before service.
- Handling Declines: If the card declines, we make efforts to contact the customer. If unsuccessful, we skip the yard and try to reschedule.
This approach ensures you get paid for your time and effort, even for one-time services.
Billing New Customers Mid-Month
When new customers sign up in the middle of a billing cycle, we charge them for their initial cleanup plus a pro-rated amount for the rest of the month. This way, they are seamlessly integrated into the regular billing schedule with other recurring clients.
Once the pro-rated month is completed, they will be billed the same as all our other customers on the 1st of each month.
Benefits of Using Sweep&Go for Billing
Choosing the right CRM can significantly simplify your billing process. At Swoop Scoop, we use Sweep&Go, which offers numerous benefits:
- Bulk Billing: Easily bill all your customers at once.
- Failed Invoice Notifications: Get automatic notifications for failed invoices.
- Customer Notifications: Customers receive email and SMS notifications if their payments fail.
- Card Updates: Customers can update their card information through a customer portal, and Sweep&Go syncs updated expiration dates automatically.
- Multiple Attempts: Sweep&Go makes multiple attempts to collect funds from declined cards.
- Fast Deposits: Funds are typically deposited within 24 hours, ensuring quick access to your money.
Conclusion
Implementing a robust billing system is essential for the success of your pooper scooper business. By requiring pre-payment, maintaining strict billing policies, and using a reliable CRM like Sweep&Go, you can ensure consistent cash flow and focus on growing your business. Streamline your billing process today and watch your business thrive.
Click here to see the full guide to starting a pooper scooper business.
