by Lisa Allen Kennard

You are a well driller, not a bill collector! That’s what many well driller’s say. After a hard day’s work, dirtier than the mud they sloshed through after a twelve-hour day, many company owners find themselves faced with the necessity of bill collecting.

A cherished customer is one who pays early to take advantage of his discount. A good customer is one who pays on or before his terms. If a customer is a day or two late, well, perhaps you can offer him a grace period, since the check is probably ‘in the mail.’

It is the client who never intended to pay you in the first place that has you cringing. Sitting down at your desk the mud falls carelessly off your work boots and liters the floor. You, on the other hand, are about to pull your hair out in frustration.  Not many people like to call delinquent accounts, business owners included. Next to a new drill bit being lost down a borehole, it can be your worst nightmare.

Emotion boggles your brain; temper flares; name-calling begins festering like a vein in bedrock about to rupture under the force of hydrofracturing. You work hard for your money! You deserve to be paid!

Dialing the customer’s number your heart continues to race. You look at his name, the date you performed the work, and the amount due. You chant this information so you won’t forget it during the conversation.  When the customer answers you lose whatever cool you mustered seconds ago. All phone etiquette flies out the window into the dark night. You’re so fired up you can’t think straight.

Excuses make you nauseous. Payroll, taxes and other operating costs remind you that collecting this money is imperative to running your company smoothly. If this customer gets away with unsuccessful payment collections, he’ll pass the word on to his buddies. The whole world will call you to drill them a free well. Impatiently, you command to be paid and you belittle your victim in the process. He promises you the moon (so you’ll hang up) and you do. You sit there bewildered, more mud falling from your boots, and wonder what the devil just happened.

Congratulations! You’ve just gotten blood from a stone. The morsel you were tossed was more than likely an empty promise. Unfortunately, the odds that you will have a repeat performance are staggeringly good. If not with this customer – with another.

Here are some tips that will aid you in handling your accounts receivable. Be systematic. Set up a chain of paperwork that starts with a written estimate so the customer can visualize his ultimate costs. Use the data from other well jobs in the area to create an educated average of depths. Perhaps 350 feet for drilling in the area is common and 61 feet of casing is usually sufficient for their location. You could use the state average or increase the amount of casing installed if the area is famous for high iron content. Subsequently, if you’re 99% sure the well will go down 500 feet, tell the consumer.

Willis ‘Bud’ Rollins, Jr., in the industry more than forty years, is the customer service representative for a New Hampshire well drilling company. When applicable, he shares with potential customers that a phenomenon is present where wells near lakes and other bodies of water (excluding the seacoast where you run the risk of hitting salt water) often need to be drilled deeper than wells on mountains or similar elevated terrain. If there are special situations that make your estimate higher than a competitor, educate your customer; explain why. Show him how to compare apples to apples. In the long run, your insights may be the determining factor in securing the job.

Are any extra services included in your drilling cost like a free drive shoe, free hydrofracturing at a certain depth, or a free water test? If so, list them. If not, spell out additional costs in layman’s terms. Do the math for them. Reiterate that this is an estimate and suggest that the price will ultimately be lower or higher, depending on their unique conditions.

Educate your client. An informed client will understand that your extra services may explain a slightly higher price per foot or set price.  Remember, customer service is relevant before, during and after a job realizes completion. With no surprises to catch the consumer off guard, he will feel some control in the decision process, even though what lies beneath the ground cannot be guaranteed.

Next, make it your policy to get a signed contract. All costs should be clearly spelled out for the client. Include your company’s payment terms and the rate of interest that will be added if the consumer is late in paying. If the bill is turned over to a lawyer or collection service due to non-payment, state that the client will be responsible for paying all reasonable fees.  This phrase lets the client know that you intend to be paid fully for your services.

After the work is successfully completed mail the bill promptly. Send a cover letter reminding him to take advantage of his discount. If you offered a free water test as part of the drilling cost, remind him to call you after his pump is installed so it can be scheduled. Thank your customer. Tell him that it was your pleasure working for him. For his convenience, include a self addressed stamped envelope. This will prompt him to pop the check in the mail.

If the payment is late and your grace period is over, make an inquiry phone call. Before you dial, gather the factual information regarding name, dates, amounts, and any tidbits of information that you have gathered about this client. For example, is he loaded with money and this is a vacation home, or was this an emergency case where the family was out of water? This type of information will be a key to how aggressive your attitude should be. Now relax: take a deep, calming breath, take more if needed. Tell emotions to step aside so you can get down to business.

Have a notebook ready to jot down remarks during the conversation made by the client, or you. Ask questions instead of tossing out demands. Is there is a problem with the work you did? If so, apologize and make plans to fix it. Is there a roadblock for the client in coming up with the money to pay for the work? If so, sound sympathetic. Then ask if he’s tried obtaining funds from one or more financial institutions? If your company does not accept payments with a credit card, can the customer obtain a cash advance? If financial institutions and credit cards appear as non-options, their mention can be an icebreaker as you attempt to steer the client into obtaining funding. It shows that you care.

Next, offer to accept a sizeable down payment toward the bill. Ask if the client can afford to pay you $200.00 per month until the balance is paid in full. No? How about $100.00? Leave room for compromise so the client feels some control in the situation. In today’s world of financial obligations, a $100.00 amount may be more realistic.

Let the customer know what day you expect his payments to reach your office. Explain that as per the signed contract you will need to start charging interest. Further explain that after each payment is received, on a specific day of the month you will calculate interest and send him a monthly statement. This reminds him to get his payments in on time so interest will be calculated at the lowest possible amount. Suggest that if the situation arises where he can send extra money before schedule, that it will result in him paying less interest overall. This will make the client feel a sense of control, also.

Because you are taking payments, communicate that you will send a Promissory Note detailing the payment schedule and amounts that you just agreed on. Ask him to have his signature notarized. To end the call on an upbeat note thank your client for his cooperation in seeing this balance paid off in a timely manner. Sometimes verbal courtesies sound foreign in a call of this nature, but the friendliness you exude will set the tone for future dealings. It may pave the path to making this a less tense relationship.

Follow through with a letter summarizing the payment agreements made during the telephone call. Your final paragraph should plainly state the date on which you intend to receive the down payment check. Draft a Promissory Note from the customer’s point of view including this same information. Send two originals – one to be returned to you and one for the client to keep in his file.  Enclose a SASE for his convenience.

Though waiting months or years to collect fully on an invoice, depending on the balance and amount of monthly payments, you will at least have steady capital coming in, even during slow months. In the event you have several customers paying monthly, in your off-season these payments may prove to be timely.

It is thoroughly important for you to call a client who is late with a payment. Allowing a grace period of a week is normal, but after that deadline comes and goes get on the phone. Call, expressing your concern that as of this date the payment has not reached your office. Keep on him. If no one is bugging him for money, why should he pay? Perhaps he is paying other bills first – letting yours slide, since you are not on top of the situation. Follow up your phone calls with brief letters that reiterate your concerns. When he does make that payment, be sure to thank him on the next statement.

If all these efforts fail, you still have options. Check your State’s legal practices regarding placing a lien on the customer’s property. This lien usually has to be placed by a certain number of days after your billing date. You should check into this tactic now in case the situation arises for necessitating its use.

Though this method doesn’t guarantee payment – it protects you. If the customer ever sells his property, lien holders are paid off first. Oftentimes, the threat of legal involvement compels a client to make financial arrangements where he may have dawdled before.

Another tactic is to hire professional personnel. They are specifically trained in effective methods of collections, including letter writing, phone calling and vehemently conveying your collection concerns for you. These professional collectors are used to asserting pressure when needed. They free you up so you can do your job twelve hours a day, in the mud, and then come home and sleep better at night.

As with any assistance you hire, expect that you will be charged for this service. If the signed contract between you and the well customer states that the client is responsible for collection fees (though you may need to pay for this service up front) you will have the legal right to bill your consumer to cover them. Once your client sees that you’re serious regarding collection avenues, many will make the good-will effort toward eliminating their debt.

With the goal of being systematic with each client, these steps will aid you in preparing estimates and handling your accounts receivable with some grace. After all, what you profess to be is a well driller, not a bill collector!