Just Got a New Customer? Avoid the “Shock” of Not Getting Paid – Learn More

When you get a call for a job from a new customer, it should be an exciting time. It means a new revenue source and more work for your company. In a lot of cases, it is, but that excitement can quickly turn to anxiety if that new customer does not pay you in a timely fashion.

While the energy and construction industries have shown significant improvements as of late, there are still many producers and general contractors who are not paying their subcontractors in a timely fashion. The fact that there are producers still not paying their municipal taxes in Alberta should serve as proof that things are not always that rosy in the patch and that all customers are not equal in their pay habits.

The Big Problem

Not getting paid by existing customers or new customers on time is a significant challenge for businesses of all sizes. Late payments can have several negative effects on your company. Including cash flow problems, increased debt, strained relationships with suppliers, increased stress and damage to your credit score.

Cash Flow Problems

One of the most significant effects of not getting paid on time is cash flow problems. Without cash on hand, it can be challenging to pay bills, meet payroll and make necessary investments in your company. Lack of cash flow is a primary cause of most business failure.

Increased Debt

Cash flow problems can force businesses to rely on credit to keep their operations running. Interest payments eat into your margins. High levels of debt limit your ability to invest in your business and take advantage of growth opportunities.

Strained Relationships with Suppliers

Late payments damage your relationships with suppliers. If you can’t pay your bills on time, suppliers are less likely to extend favorable terms or discounts to you in the future.

Increased Stress

Dealing with late payments is stressful and time-consuming. It is frustrating chasing down payments when you could be focusing on other business tasks. This stress can spill over into other areas of your life, making in challenging to balance your work and personal responsibilities effectively.

Damage to Your Credit Score

If you are relying on credit to keep your business running, missed payments can lead to late fees, penalties and damage to your credit score. A damaged credit score can make it more challenging to secure financing or other forms of credit in the future.

A Little Prevention Goes a Long Way                                                                                                                     

Life is full of pre-cautionary warnings. Look both ways before you cross the street, check before you dig, consult the road report before you drive. These simple examples can all save you from a possible disaster.

Taking on a new customer is no different. It is always best to do some due diligence before deploying your personnel and equipment on a job, otherwise you may be going to work for free.

The same goes for existing customers. While a current customer may be paying on time now, it never hurts to check on them occasionally to identify any changes in payment patterns. Many defaults have come from companies that were once “good customers”. Without awareness, your customer relationship risks being exploited to their benefit.

Check Out PayScore

PayScore is the first of its kind platform built for Canadian construction contractors and energy service companies. PayScore gives your company a unique platform to not only look up payment reliability of new customers but also, monitor existing customers in case they start lagging in their payment commitments. All this information is provided by people just like you, the companies who experience the fallout when they do or do not get paid.

As a Construction Contractor, Energy Service Company or Supplier you can see if a General Contractor, Producer or Project Owner has a reliable payment history. Wouldn’t it be valuable to know a customer’s payment reliability before you waste your time, labour and materials?

Visit Payscore Here for More Information

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