Billing may be one of the toughest things about running as seasonal business like that of a swimming pool contractor. Work flows fast and furious for a fixed period of time, and you have to put in the hours to take care of your customers and to book as much revenue as possible.
That’s usually the case for Jon Fox, the owner of Integrity Pool & Spa Services in Pennsylvania. As you can imagine, caring for pools in the Northeast means carefully shutting them down before the winter freeze and then rapidly opening them back up again in spring.
“You’re basically trusting your customer to pay because 70-80% of the time, they’re not even home,” Fox said. “You’re going out there and you’re giving them your time and your materials.”
Fox and business partner Charlie Kreichelt started as swimming pool contractors in 2004, so they know a few things about staying in business. “We were going pretty fast at first,” Fox said. “We got a few seasons under our belt before the market crashed.”
Many young businesses caved under the weight of the recession, but Fox managed to stay open, even if he didn’t grow as much as he had originally expected. Today he’s seeing the same thing as the rest of us: uneven but hopeful signs that the economy is recovering.
“You get mixed signals,” he explained. “Some people are more willing to spend money, but there are still a good number of people spending what they need to get by instead of getting anything they want. If something needs to be fixed on the pool, they’ll do that” and not much else.
Fox sends out invoices, but he certainly doesn’t have time to chase after late payments while he’s in the thick of his season.
“The bill says its due in ten days but we don’t really do anything as far as chase them if they’re late,” Fox said. “They have the option to go onto the website and pay with their credit card, but not a lot of them do that. Mostly they mail in checks.”
But not all of them, and not all the time. “We trust that they’re going to pay. [But] there’s a decent amount of accounts receivable out there at any moment,” Fox said, saying that it often adds up to ten percent of his billings or more.
His first efforts at collections didn’t fit his business style. “We’d send [the customer] a certified letter saying, ‘Pay or we’ll take you to court.’ But we never really did anything.”
Many business owners find themselves in the same predicament. You want to demand payment, but sometimes the effort required seems like a loss greater than the amount owed. It’s certainly not the way you want to spend your free time.
“It’s busy enough trying to stay on top of the work you do every day,” Fox said. “And then you’ve got to worry about past due balances and to send them a new invoice every couple of weeks?”
Echoing the frustrations of many entrepreneurs, he added that “We always talked about finding some sort of collection agency to use.”
He found Optio through the Northeast Spa and Pool Association, and integrated our services into his business.
Customized communications originate from Optio with Integrity’s business name and contact information. While clearly conveying that payment is late, the communications are extremely polite and assume that the recipient will make good.
“It’s nice that it starts out in a friendly way,” he said. “Optio’s letters tell the customer to contact us. It’s just to remind them that they have a balance due and to contact us or to mail payment to us.”
The fact the letters come from a third party gives them just enough weight to prompt action – and nothing more. “It’s not threatening to the customer,” Fox said, “We had a couple people call and apologize. They don’t get upset. They send the payment and you don’t ever hear anything bad about it.”
Now Fox lets customers know about the Optio services in advance. “We tell people that we have a program in place. Once an invoice is unpaid for thirty days, they go into this service and they’ll get communications. We don’t tell them it’s a collection agency. We tell them it’s a service we have set up to collect payments.”
This low-key method began producing results for Integrity immediately, and since Optio’s services can be implemented for a flat-fee per client – often less than $20 – the vast majority of the money collected dropped directly to Fox’ bottom line.
It also fit his business model much better. “Sometimes I feel customers would feel off-put by being put into a collection [agency] and that’s why it’s so nice that Optio has this first stage. The majority of them end up paying off of the friendly [approach].”
Needless to say, it’s often the intangible results that help a business owner the most – especially one who wants to expand and grow, as does Fox.
Growth requires clear thought and excellent energy – two things that in-house collection calls can rapidly deplete.
“Optio has been great,” Fox explained. “It’s not even about the return. It’s about the ease of it. That’s the main thing.”