· gospel according to dan · 5 min read

Surveyors should collect fees up front

Let your clients trust you, and stop chasing after payments.
💡The following is an excerpt from Dan Beardslee’s “The Management Handbook for Land Surveyors”.

Rule 12: When a surveyor get hired, someone has to not trust someone; either you work and hope you will get paid or you get paid and the client hopes you will work.

Of all the problems that surveyors have expressed to me over the years, the most common is probably “how do I get paid?” Or “If I could just collect what was owing, I would be in good financial shape.”

Traditionally, surveyors have the notion that they should work and get paid when they are done. When you think about this, it doesn’t really make sense. Why should surveyors be less trustworthy than their clients? In other words, wouldn’t it be a better idea for the client to give you some money before you go to work?

Thirty years ago it was unheard of for a surveyor to request a retainer. Twenty years ago a few surveyors asked for retainer. Ten years ago, asking for a retainer was an accepted practice, and today, almost all surveyors ask for one. That’s a nice trend, but why not get all the money up front?

In a recent poll taken on an Internet discussion board the question was asked: “Do you collect all or a portion of your fees up front?” The answers were as follows:

Yes, always: 3
Yes, more than 50% of the time: 3
Yes, less than 50% of the time: 8
No: 22
Yes: 50% for new clients: 5

So you can see that fully 54% never collect any part of the fee up front and only 7% always collect some or all of their fee up front. The rest are somewhere in between. This was by no means a scientific survey, but probably pretty representative of how many land surveyors are willing to trust their clients to pay.

The usual argument is that you don’t want to come across as not trusting the client. But that’s a weak argument, too. If the client is unwilling to front the money he must not trust you to do the work to the same degree you don’t trust him to pay.

If you want to make your business a cash business, get paid before you work, not after.

Let your clients trust you, so you don’t have to trust them.

Is it always true?

If you find yourself spending too much time chasing after payments, you really should consider collecting more money up front.

Sometimes it’s worth it to lose a few customers to charging up front, in exchange for better cash flow and financial security. If you do happen to lose a few jobs, it may be a blessing in disguise - I’m pretty sure the people who will not pay you at the end of a job are the same people who would not pay you half up front at the start. Think of it as a filter.

It also seems that the practice is common enough now that most people won’t even question it. The next time you have to pay in full before your (lawn care, renovations, inspection, etc) starts, think about your business, which is so much more complex, and why you can’t do the same.

I know things aren’t always so simple and maybe your market is a bit different, but here are some points to consider:

  1. New Clients: For new client relationships where there is no established trust or previous interaction history, it is prudent for surveyors to collect some or all fees up front. This approach mitigates the risk of non-payment after the service is rendered.
  2. Large or Complex Projects: For projects that are particularly large or complex, requiring significant upfront resources or time investment, collecting fees up front ensures that the surveyor is not left bearing a financial burden should the client decide to default on payment.
  3. Clients with a History of Late Payments: If there is a known history or evidence suggesting a client may be unreliable in fulfilling payment obligations, it is reasonable for a surveyor to require payment upfront to protect their financial interests.

The most important thing is to communicate clearly and professionally about payment terms to avoid misunderstandings and foster trust with clients.

It also depends on the type of job

Different kinds of surveying require different kinds of payments. For a government contract, you’ll never get money upfront, but then again they never miss payments. Whether your firm gets paid for all the work they do is also only part of the battle. Even if you do get paid in full, you may be earning less on that particular job than you could be elsewhere.

Solving the financial battle requires organized reports and charts to figure out a very important question: what type of jobs make you the most profit? If your firm is still using pen and paper or Excel, you might never know the answer to this question.

Cyanic Job Book can solve these financial issues as it is built specifically for the surveying business and provides all the information you would need to maximize your profits. For example, Job Book’s Active Job Dashboard will allow you to analyze which jobs are making or losing money, and which of your clients are the best.

Client trust, getting paid, and managing the rest of your financials are all important parts of surveying. What’s great about Job Book is that it allows project managers to see job health and financials when usually only your accountant has access to this information. Job Book will give you a competitive edge and allow your firm to be more profitable.

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