50% deposit or 100% up front?????

[Cyrus]

Hi there I am considering asking my customers to pay the full balance for their framing up front, if that is indeed comfortable, as the constant
residue of un collected work and time spent sending out reminders, is negatively affecting cash flow, I feel. I currently ask for 50% deposit, the rest on collection. Does anyone already do this/have any thoughts?

Many thanks Cyrus

[Not your average framer]

I am really sorry to hear this. This is a terrible thing! Do you know if any of these customers have moved away during the covid crisis. Quite a lot of people from in and around the London area have moved down to Devon, which is where I am and lots of them where in a big hurry to move. Perhaps some of them are no longer contactable at their original locations and this might explain the difficulties which you are encountering. I can easily understand you frustrastion and the difficulties this is causing for you. London expenses and overheads are some of the heavest in the country and obviously a major burden for you. I can't see any easy answers to this. Increased deposits may in fact deter customers from doing business with you, but what other alternates are likely to be open to you.

None of the most obvious ways of dealing with this are particularly helpful, One possible option is to advise them that you may be intending to exercise your option to sell their debt to a debit collection agency, who will also register the debt with the usual credit agencies, this might be one way of putting some pressure on them to settle with you. Another more friendly option might be to offer them a discount on the outstanding debt, if the settle within a specified amount of time. Unfortunately, it might need to be something like reducing the outstanding balance by even as much as half to get any worthwhile results. I have even heard of businesses threatening to charge the customers for storage costs. There is some sort of legal provision to be able to charge interest on outstanding debts, but I don't know anything much about the details, or how it operates.

Perhaps the easiest thing to do it to keep the deposit and recover the framing materials to use on other jobs, to at least create some extra income from the materials. After all, if the customer has not paid the bill, the materials are still yours and not theirs. Have you spoken to you local trading standards officer regarding what you can legally do without any come back. I feel sure that there will be some options which you can legally take which won't come back to bite you. Have you been looking at other ways of creating some additional cashflow, while using your existing facilities and stock. These are times where cashflow is the number one thing for survival and any good moves which you can make in this regard have got to be good.

I hope that things will soon improve for you.
Mark.

[Gesso&Bole]

I've got 3 points to make on this topic that might help

1) getting full payment

My standard line is

' Would you like to pay half now, and half on collection, or just pay it all now, and it's out of the way?'

I find about 75/80%, but not all pay it all up front.

2) Speed of turnaround.

I have always found that if I can keep my turnaround to a week, I don't have a problem with slow/non collectors, at 2 weeks turnaround I start to notice people not coming straight in to collect. If it takes me more than 2 weeks, customers have often 'gone off the boil' and can be a significant problem.

3) Now that I have moved my business to appointment only, I phone the customer to book an appointment to collect. Fingers crossed this has worked brilliantly so far

[Not your average framer]

Hi Jeremy,

That really useful information and something which I think will be helpful to me as well. This is so helpful.
Mark.

[iorek]

I have 2 signs prominently displayed.

1 - Framing work must be paid for upfront.
2 - Rush Fee +35%

Nobody questions it, nobody asks to get bumped up the list.

This is an issue that we can all take responsibility for. It's asking for trouble to not take payment upfront.

I am exceedingly friendly too. Hope that helps

[Justintime]

100% upfront with the odd exception for a regular customer who likes to leave the design up to me.
"Would you like to pay by card?" is all I ask.

[Not your average framer]

I think that 100 percent up front makes a lot of sense, if you need to comit money to buying materials and labour which doing the job. The stakes are much higher in these difficult times for small businesses. Over the years I've had a few who did not collect and pay for their work. Sometimes wives spend money which their husbands then say no to. I've had that happen to me. What are you going to do about it, sue them? I they don't care about it there's not a lot you can do about it and you are out of pocket.