Issue link: http://psai.uberflip.com/i/1394762
10 I PSAI Association Insight, July 21, 2021 Effective Credit Practices Keep You from Getting Stiffed • Have new contract customers pay up front. Future billing is for the month to come, not the month that has just passed. Cell phone companies do it. Cable companies do it. Portable sanitation companies can do it also. • Require special event customers to put 50% down. This prevents you from losing money if they cancel or are otherwise up to no good. Several portable sanitation operators have been stiffed over the years on special events when organizers simply disappeared without paying. Which leads to— Variation #1: Have the customer pay the other 50% of the contract on the day of delivery; send a final bill only for incidentals. If you are not used to asking for the money up front, this may seem like a deal no one will take. Actually, the approach works well for many portable sanitation companies. The key is talking to customers about your payment terms up front and making sure they understand what you require at various times in the process. As long as they understand the process and sign a contract up front, everyone wins. Variation #2: Require the customer to keep a credit card on file. This is sometimes easier than getting payment on the day of delivery. The downside is that shadier customers won't have enough credit left on their cards to cover your costs if you have to bill the card. So if you use the credit- card-on-file approach, consider having a process whereby you put a "hold" on the card for an amount of money that protects your company. This process will have to be covered in your contract paperwork and explained to the customer up front—much like rental car companies do when you rent one of their vehicles. Dealing with Objections You may be thinking about these payment processes and hearing the objections your customers will raise if you update your rental terms. Here's how you can respond to the most common pushback arguments you'll hear. It can happen to anyone. New or seasoned, sooner or later, a customer isn't going to pay you. Nobody likes to have it happen, but it is one of the things that comes with the territory of being in business. The trick is to minimize its effect on your bottom line. Here are the best ideas we have heard from portable sanitation operators to prevent non-payment issues from ruining your financial results. « « (continued on page 11)