By Andrew Kaye, chief executive of Transpact.com:
End each year Thousands of Pounds Richer…
… Installers are ending each year hundreds or thousands of pounds richer simply by using escrow as the job’s payment method.
If you are not yet using escrow to be paid, imagine you could guarantee 100% payment to invoice on every job, with no debt chasing and no time spent on money owed or write-offs. Equally, you could be providing your customers with some tangible peace of mind when it comes to payment protection.
Now ask yourself why you are not one of the installers currently using escrow to achieve receipt of 100% of quoted payment on every transaction you undertake?
Traditionally, installers wrongly believe they do not have bad debt problems. As an example, say an installer comes to the end of a job and has £4,000 still owed to them (perhaps from a £9,000 job where £5,000 has already been paid to them).
It’s possible the client may use the outstanding balance as a lever to negotiate the price down. After a significant amount of negotiation later the installer may agree to write-off £1,500 from the bill if the customer pays him £2,500 out of the £4,000 owed. The installer feels great, as he has ended up being paid in full – but at what cost? He has lost £1,500 in negotiated discounts!
Compare with an installer who uses escrow to be paid for every transaction.
After contract signing, the client pays the escrow company in full for the work, before the work begins (staged payments are no problem either).
The installer is now assured that if he meets the written contract he will be paid 100% of the money owed. No discounts, no write-offs, no debt chasing – just 100% payment, every time (as the client has already paid, and the payment is securely held by an independent FCA authorised party).
No wonder that more and more installers are now using escrow on every job they undertake to increase their year’s revenue by many thousands of pounds.
Escrow provides the following attractions in addition:
The installer’s client gets a guarantee that they will received the work they were promised in the contract or their money back. This is a huge plus for the customer. Having a built-in money back if not contract satisfied guarantee is a must have for the consumer, and automatically provided by using escrow.
The installer gets a great marketing tool to promote their service over other installers – the above guarantee to the customer is a significant selling tool.
The customer knows that only a high quality installer would use escrow, so further enhancing the installer’s reputation.
The cost of escrow is almost negligible when compared to the bad debt saved and the debt chasing time eliminated.
The installer can, in the future, use the escrowed funds to buy materials for the job from selected builders merchants without using up their credit limit at the builders merchant in any way – selected builders-merchants are expected to be announced next year for this scheme.
Customers who never intended to pay the full fee won’t use escrow, so those loss making bad-apple customers who were always going to end up as bad-debts (and losses and aggravation) are eliminated before you begin.
Payment is made from escrow using the UK’s Faster Payment Service (FPS), so payment arrives cleared in your bank account within a few seconds or minutes.
Escrow is available now at www.bikbbi.org.uk/protection/escrow-payments, and requires you to fill in the simple form there to use the process. It is quick, safe and essential for every modern installer.
EDUCATION | STANDARDS | SUSTAINABILITY | COMPLIANCE |