Payment Best Practices in Home Services

Post date :

Mar 8, 2024

Consider these best practices to help you reduce collections in your business and get paid faster by your clients.

Risk Assessment

It can be difficult to accurately predict a customers ability or likelihood to pay you in full and on time. This is an unpleasant aspect of the home services industry and a risk to your business. Being able to more accurately assess and predict risk will help you reduce collections, improve cashflows and make more money. The GlassHouse platform offers several ways for you to look at overall customer risk to help you select great customers who will pay you in full and on time. 

Credit Scoring - You can pull soft credit scores with a simple confirmation from a client. These pulls do not impact customer credit ratings at all but they can give you a strong indication of overall credit worthiness. In the event of a poor rating, you don’t have to bail on the opportunity, but you may need to take payment or deposits ahead of time to reduce your risk on the job. 

Payment History - By reviewing the clients prior behaviors from other service providers, you can see if they have a trend of under or short payment. Think of this as ‘past behavior is a strong indicator of future outcomes’ - especially when the payment history is from other home services businesses that probably offer similar services as you. 

Customer Intel - Being able to look at multiple aspects about a customer can give you a 360 degree view of the buyer. How do they treat other businesses, what types of reviews do they leave on companies, whats their payment history and what is the feedback from other businesses in the area. Getting information ahead of taking a job will allow you to set clear expectations and reduce expensive collections issues. 

Prepayment Authorization

Collecting customer payment information ahead of the job helps to insure timely payment and payment in full. Even if you aren’t pre-charging or even taking a deposit, having a customer fill out payment information to confirm how they intend to pay will allow you to screen for customers who are payment risks. This can be as simple as asking for the client to provide basic payment information (payment method and account numbers) before work is done. A customer who is unwilling to provide basic information may be indicating that they are going to withhold some portion of their payment or drag out payment at a later time. 

We also recommend that you give an estimated cost ahead of service and get the client to approve the estimate digitally. This can usually be done by your field management system. Contested bills are easier to manage if you have the clients pre-approval on the value, terms and payment method. 


For larger jobs or services where you are purchasing expensive products/inventory, it is a best practice to take a deposit to cover the cost of materials before you provide service. An good example is charging for HVAC equipment ahead of time to ensure that you are not having to float the cost of the inventory on behalf of the client. A smaller scale example would be to take a deposit for a service ahead of time to dissuade clients from setting appointments that they aren’t going to attend, which results in lost time or the need to revisit the same job multiple times to fulfill the service.

Payment on File

Taking a credit card to keep on file can help reduce the time to pay for most jobs and reduce client churn. This is especially true for recurring services and maintenance plans. By holding a card, you can schedule payment and smooth our monthly cash flows. It also changes the billing process from an ‘invoice’ to a ‘statement’ and removes the decision from the client to cancel b/c by the time they get their bill, it’s already been paid. For commercial services or very large jobs, you may not find your clients are open to having payment on file, but you can still have them pre-authorize the payment even if you plan to invoice them for each job or service on billing terms. 

Billing and Ease of Payment

Make it easy to pay you and bill immediately when the job is done. Most accounting and service CRM systems allow for electronic invoicing and/or payment processing. Setup a process to reduce the time from service to billing and get that time as short as you can. The longer you wait to bill, the higher the rate of contested bills or delayed payments you will see. 

Payment Onsite

Mobile payment processing tools like Square or from your CRM tools can reduce billing to same day on many small to mid-sized jobs. We recommend that you provide your techs with an easy way to collect credit card payments in the field and email a final payment receipt. The best way to review the value of this offering is to compare the overall cost of payment processing to your current collections and bad-debt expense. While field payments will incur a credit card processing fee, we usually see that the overall cost is less than the cost of bad debt. 

Financing Options

For larger jobs (jobs that go into the $50k and above range) you may want to provide financing options. This is best suited to large jobs due to the cost of financing and the time it can take to secure lines of credit. But when jobs go over the $50k range or into the hundreds of thousands for things like pool construction or large scale renovations, you will find many home owners are open to discussing financing options and/or working with their providers to look at structured payment methods. Some leading CRM tools have integrated payment options and financing offerings that you can pull directly into your overall tech stack. We recommend that you reach out to your CRM company to see if they have any options available (and also shop around and see what else is out there).