Quest Magazine - Home

Independent resettlement & recruitment guide for serving Armed Forces & Veterans

Get paid – painlessly

Get paid – painlessly


08 Feb, 2018

This article is for you if you’re thinking about self-employment and going it alone, says regular Quest contributor, Steve Bulleyment, director of Lincolnshire-based specialist auto locksmith company Car Key Man. He’s here with more of his customary good advice – this month, very pertinently, his topic is getting paid on time

January saw the collapse of the second largest construction firm in the UK, Carillion. The multinational facilities management and construction services giant, which has been feeding smaller suppliers for years, has finally run out of money. While this is bad news for its 20,000 UK employees (who knows how many are ex-Forces?), spare a thought for the many thousands of small businesses that will now also be in big trouble as a result of its demise.

Survival in business does not just depend on making a profit. That alone won’t pay the bills. Getting paid on time, after completing the work, is essential. Unfortunately, when you start out in business, no one tells you how to make this happen.

How to get paid on time

Statements, invoices, terms of business and credit accounts are all things you need to know about in the business world, as they set the rules for being paid. It won’t be natural to you, because currently, every month, money appears in your account and you never need to ask for it. However, things are different in the outside world and most of us learn that the hard way. I hope that this article will help you to avoid having to learn the hard way too.

Customers don’t want to give you money. They’ll happily ask you to come along, to buy the parts and spend your time doing the work. It’s unlikely that Mr or Ms Average will string you along – more likely they’ll get into financial difficulty after they have committed to getting the work done. You’ll fit a kitchen or install a central heating system and then there’s that awkward moment when you want your money and they want to hold on to it – or they simply don’t have it. Or, if they’re a business, there will be situations out of their control, such as the supply chain underneath Carillion. The important thing is for you to control the conversation about getting paid.

So the first thing you must do, before starting any work, is to agree the terms of business. I was guilty in my early days of self-employment of just presuming that people would pay me immediately. With my retail customers, who’d lost their car keys, this wasn’t an issue as I had the keys and they needed them, so they’d happily pay. However, with a business such as a garage or a manufacturing company, often they wouldn’t expect to pay immediately. They would just assume they had 30 or 60 days’ credit, and that they could send a cheque in the post. I didn’t know any better, so I let it happen.

No, this isn’t correct …

When you get the call to quote anyone for a paid job, part of the quote is to agree how long they will take to pay you. I have good customers that always take up to 60 days to pay me. That’s OK now, because I know them, we have a relationship and they always do pay on time. However, when you start out with a new customer, you must agree when that payment will come. This should be stated clearly on the invoice you give them. An invoice is a document that clearly states what work you have done, the rate you have charged them and when the payment is due. Put it in bold, using black or red ink, and point out the due date when you hand them the bill or in a covering email. After all, it’s your money that you have earned.

If your customer is a retail Mr or Ms, they should pay you immediately. If you’re fitting a kitchen, you should ask for a deposit. Outlaying £5,000 for parts and then fitting them into a house will expose you to risk, and you can’t just assume these nice people will pay you. Sorry if that sounds untrusting and cynical, but there are so many stories of brick walls built and gardens landscaped with no money forthcoming, so treat them the same as Asda or Tesco treat you: they won’t let you take your shopping home and then wait for you to send them the money in 60 days, so there’s no reason you should.

Business customers

If you’ve done work for a business and you’ve agreed when you’ll get paid – in 30 or 60 days – you’ll need to send a statement to the customer. That was my downfall, as I didn’t appreciate how important this is.

A statement is just the same as the one you get from your credit card company, listing each transaction, when it was made and when payment is due. Many companies, especially those in the motor trade, will not pay you without a monthly statement showing clearly when the payment is due. Imagine you’re the person in the accounts department and your job is to pay your suppliers. It’s simple if a customer like me sends them a statement at the start of the month, with copies of all invoices attached. That way they’ll have every piece of information to hand. However, if you do a job and leave a paper copy of the bill with someone at the factory, the chances of the accounts department seeing it are small. It will get lost and you won’t get paid. So, take control of invoices and statements: when you’ve sent a statement, call the company accounts department and work on forming a good relationship with the person who is going to pay you. Introduce yourself, explain that you’re counting on the money and agree on a date that you’ll get it. Remember that the person paying you is just like you: they have a family, they have money concerns and understand how important getting paid is. If you talk to them and tell them you need the money otherwise your kids will starve, you’ll stick in their mind and, hopefully, the cheque or BACS payment will arrive on time.

Steve’s business, the Car Key Man, is a specialist auto locksmith company covering Lincolnshire. Launching in 2004, Steve spotted an opportunity to solve the problem of replacing lost and stolen car keys. The company now offers workshop facilities as well as a mobile service. Recognising the needs of concerned vehicle owners, it offers free consultations to find an affordable solution to the growing number of car key problems.

Warning signs

It can be tricky to judge people. Often the best-dressed customers come into our shop, driving the latest model of car and don’t want to give us even a deposit before we order a second key for them. Other times, the scruffiest owners of the scruffiest cars surprise us when they take out a big pile of cash and pay us in full, in advance!

It’s important to look out for warning signs that a customer isn’t going to pay you. In the case of Carillion, just a few months ago it sent out a letter to all the people it owed money to. It told them that, instead of paying at 60 days, it was going to pay at 90. With a small business, it may be that you can’t get hold of the accounts department, or they work only two days a week. The worst signs are when they claim that there is an error on your invoice or statement and you need to resubmit the paperwork. That’s usually a delaying tactic and you shouldn’t settle for it.

What you need to do

If this happens to you, and a customer keeps fobbing you off, you need to limit your losses. You must put them on stop. This is when you no longer complete further work for them until they pay their outstanding bill, or part of it. It feels unnatural and awkward, and the work they give you may be good, profitable work, however as I said at the outset, profit alone will not pay your business and household bills. The only thing that will is cash in the bank, getting paid by your customers. The most effective thing is to visit them in person. It’s very hard to withhold money from someone once you meet them, especially when you build a relationship. Take control of the situation, just like you’ve done in the Forces. Getting paid is all about your survival as a business: 50% of businesses fail in their first year and owe money to their suppliers. Use the skills you’ve learned in the Forces to be polite but firm, and to take control.

Visit the
Car Key Man YouTube Channel at:

Tips on getting paid on time

  • Before you start, agree on a date when you will get paid.
  • Consider a card machine – most people have access to a credit card.
  • Be systematic in chasing your money – it’s the most important part of the business.
  • Don’t make it personal. Even the nicest people will owe you money – don’t let them off the hook.

There are new skills for you to learn and a whole new language to understand, but once you know it business life is so much easier. Most people are good deep down and problems getting paid arise for a mixture of reasons. But it’s really down to you. Good luck!

Get in touch

T: 07832 147601 or 01522 514141