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Are you getting paid on time?

Posted by Joe Bennett on 25th February 2014

Early Payment Initiative: Are you getting paid on time?

The UK was one of the first European countries to introduce late payment legislation back in 1998 with large firms being charged interest for late payment to small firms.  In 2002 the legislation was amended to include payment from small firms also.  In a nutshell, this means that all business, regardless of size should pay for goods and services in a fair and reasonable time scale.  This is known as the Prompt Payment Scheme

Due to the positive success of the Prompt Payment Scheme, the Government introduced a series of Early Payment Schemes which ensure that all businesses no matter who they are doing business with can access a scheme which encourages timely payment.

Early Payment Schemes Introduced

In March 2013, the legislation was reviewed and a process implemented that makes chasing late payments a simpler process for small business.  The Government pledged their support for early payment programmes where clients receive an incentive for paying early or in accordance with agreed payment terms.  This is no longer just limited to business to business transactions, but to anyone who does business i.e. an electrician carrying out work in a clients home.

The rewards of paying on time far outweigh just the payment aspect.  Prompt payment increases confidence amongst business owners which ultimately leads to investment and growth.  Concerns over late payment or even non-payment can have overall adverse effects on economy recovery.

How late payment is affecting electricians

The introduction of Early Payment Schemes seems to a positive step forward particularly for electricians and small electrical contractors who carry out most of their work for members of the public.  According to the payment organisation BACS, small and medium sized businesses are owed an enormous £35 billion in late payments which equates to approximately £45,000 per business.

Almost one year since the introduction of Early Payment Schemes, we decided to survey electricians across the UK to find out if such initiatives had any effect on their business in terms of getting paid quicker and how well the scheme works in reality.

Survey Results

Analysing the results

We had another great response to our survey and getting paid on time is certainly a subject that is important to electricians.  There were two things that were particularly apparent in the comments made to our survey.

• Taking payments upfront for larger jobs

We had a number of comments surrounding payment for work that exceeding £1000 in value.  A growing number of electricians are asking for a percentage of the total payment in staged payments.  A good example of this is 50% of the payment at the end of the first fix and the remainder at the end of the second fix. One electrician has worked in this way for the past 5 years without any problems.

It certainly seems that staged payments is becoming favoured by both electricians and their customers.  Operating a staged payment policy increases your chances of being paid and less chance having to chase for the payment once the job is complete.

• Payment terms

Invoices are an absolute must and payment terms must be clearly stated on them.  Most of the electricians surveyed were happy with payment within 7 days of the job finishing.  98% of small jobs were paid for without any problems with only 1 electrician reporting a payment taking 90 days or more to receive.

Are Early Payment Initiatives Working?

Offering flexible payments is proving to be a good early payment initiative as far as electricians are concerned. 77% of survey respondents are paid within 14 days of the job completing with an additional 13% being paid before work begins.  Only 7% of electricians are reporting later payments.  A mix of fair business practices particularly offering staged payments to clients as well as clear payment terms on invoices is ensuring timely payment for electricians.

Categories: paid on time

Electric Vehicle Charging Points?

Posted by Joe Bennett on 6th January 2014

Charging the Nation?

Can we meet the demand for electric vehicle charging points?

The demand for electric vehicle charging points is set to rise significantly in order to meet future demands and develop transport infrastructure.  Potentially this is another key source of income for electricians as more businesses roll out electric vehicle charging points which in turn will lead to charging points being installed at domestic properties.

EV to date

Currently any business that is forward thinking enough to install electric vehicle charging points make the news! As much as that is great publicity, more needs to be done to develop a growing demand for sustainability.  The government wants the uptake of electric vehicle (EV) charging points to increase so has set aside funding to pay for EV charging points.

One of the main barriers to the wide spread use of the electric car is the availability of EV charging points.  As of September 2013, only 4,100 electric cars had been registered, with local authorities across the UK having spent £7.2 million installing EV charging points since April 2010.

If the governments aim of cutting carbon emissions and developing the transport infrastructure to meet future needs is to come to fruition, then greater use of electric vehicles is a good way of achieving this.  Developing a new network of rapid charge points will be necessary to fulfil this aim.

Current developments

Just over a week ago, IKEA announced that all 18 of its UK stores will have electric vehicle charging points by the end of the year.  They have teamed up with Nissan and green energy supplier Ecotricity.

The EV points will deliver an 80% charge to an electric car within 30 minutes.  This will make IKEA the first major retail chain to offer the much anticipated 'rapid charge' points at every store.

Is demand for EV charge points growing?

The electric vehicle market is growing which in turn is putting a bigger demand on developing the required infrastructure.

So far in 2013, in excess of 1,500 LEAFS, Nissans all new electric vehicle, have been sold.  This figure is 3 times up on comparable sales of the LEAF in 2012.

Additionally, research carried out by POD Point, who are one of the leading UK charging infrastructure providers reveal that IKEA in Wembley was the most popular place to charge an electric car in the whole of the London network.

What else is happening?

Aside from the Nissan and IKEA developments, sales of all electric cars in the UK reached nearly 1,150 in the third quarter of 2013, an increase of 25% on the second quarter.

The governments £5000 Plug In car grant scheme has achieved a record 1,149 new registrations, the highest figure of any quarter since the scheme began.  This suggests that the electric vehicle market is growing leading to a demand in vehicle charging points.

Electric vehicle charging point demand

Sustainable development consultancy Electric Village have announced that demand for charging station hosts and locations is growing particularly in prime locations such as city centres, high streets, suburban areas and major highways.  They estimate that within the next 18 months there will be a requirement for 5000-6000 new locations for EV charging points to support the £37 million funding initiative by the Office for Low Emission Vehicles (OLEV) which have supported 78 infrastructure projects in the UK.  A further 4000 sites are required by private sector organisations such as car companies, fleet operators, taxi companies and energy companies.

So it is clear to see demand is growing!

Moving Forward

Whether the demand for EV charging points can be met will require the combined efforts of many.

• Local leaders need to develop local initiatives to ensure the planned infrastructure fits in with community needs and priorities.

• Electricity distributors need to factor in additional demand from electric vehicles as part of their plans to reinforce the grid.

•  Electricity suppliers have an opportunity to develop new tariffs for electric vehicles.

• Businesses and investors need to act on commercial opportunities for EC charging points.

Conclusion

The government is currently funding £400 million to support the early market for electric vehicles which comprises of purchase grants, installing charge points as well as research and development.  This package will end in April 2015.

After this, the government is planning a further support package to last until 2020 of £500 million which will build on the current package.  This package will support inward investment as well as increasing vehicle uptake.

EV charge points and vehicles is a fast moving market and updates are happening frequently.  It will be interesting to see how the range of different parties that have been brought together will help to make this market a success.

 

Trade Skills 4U Launches Job Alerts

Posted by Joe Bennett on 24th September 2013

Trade Skills 4U Jobs

As Britain’s number one training company it won’t come as any surprise that we are regularly asked for skilled electricians for site work.

Recruitment services for employers can be very expensive and difficult to find the correct type of tradesmen required for the job. Although in the past we have not dealt directly with placement and recruitment we have and always will try to help our customers as much as possible after leaving us.

 

Therefore we will be posting any jobs that come our way on all our social media (Facebook)(Twitter) as soon as we receive them, to give you a real advantage to getting work and contracts.

All you need to do is like our Facebook page or follow us on Twitter and you will receive all job alerts as and when they come through.

 

Categories: jobs-alert

Right you are qualified, what do you do next?

Posted by Joe Bennett on 16th September 2013

Gaining your electrical qualifications is an exciting time, but the shine can be taken off if you have no idea what you should be doing once qualified.

We have spoken to the more experienced guys who have given us some essential steps to take once qualified – these steps will not only give you experience in the trade but will also help to spread the word about your services.

• Things to think about before you finish your qualifications

There are many different routes into the industry whether it is domestic or commercial but the same logic always applies.

Many of our students will leave us to set up independently as sole traders, the difference between success and failure is your ability to think and act like a businessman and not an electrician.

You must realise that there are electricians out there that could be earning much higher salaries for much less stress if only they had a better business brain.

At the end of the day it is about exposure of your skills that will guarantee you regular work, if nobody sees or hears about you they will not be able to use you.

Just like any business you need to learn how to market yourself correctly. Here is a list of things we recommend you consider putting into place before finishing your qualifications:

Website- 90% of customers search for services on the web and having a professional website is a must!

Paid Search-use of even a limited budget can help you to rank above others on search engines.

Checkatrade.com - Consider using companies such as this to help you promote a healthy professional image.

Setting up your company?(Bank, Insurance, Company Name) –There can be a few teething problems when setting everything up, you as many well sort these out while you are studying instead of not being able to take on work because you are too tied up getting all this into place.

Business cards- Affordable and professional business cards are very important as people to tend to store them just in case the lights do go out one day. Vistaprint.co.uk is a good company to use.

Social Media- You cannot underestimate the importance and effectiveness of Facebook and Twitter, for example, they are great for marketing and networking and best of all they are free.

 Getting Experience

Without any experience, obtaining a paid position can be more difficult.  A select few of the students who have undertaken training with Trade Skills 4 U find that offering their skills freely to begin with has given them some onsite experience which has helped with networking and has led to employment. Another idea would be to start sourcing your own work and if you come across a job you do not feel confident enough to complete then call an experienced electrician and offer him a percentage of the job fee. The advantages to this are that you are still getting paid and also learning from a skilled electrician and the customer will use you again as they are using your company.

You may well find yourself with the offer of paid employment following a period of gaining experience. Many electricians find they need a helping hand on larger projects and paid temporary work is a good way of working towards a more permanent position.

• Do work for friends and family

If you have decided to set up your own business after gaining qualifications, you will be taking one of the most common routes our students take.  It can take a while to get your name 'out there' initially and it is always a good idea to have a portfolio of example work that you are able to show to your potential clients.

The best way of obtaining your initial work is to carry out work for family and friends – after all, these are the very people who want you to succeed in your new career more than anyone else.

• Get some tools

This is essential if you plan to run your own business and is a great advantage if you are looking for paid employment.  Having your own tools also gives you the added advantage of being familiar with their use.  Furthermore, you can ensure you are kitted out with the essentials.  Our recent post – definitive tools of the trade listed must have tools as recommended by electricians.  Having your own tools means you are serious about your work and its one less expense an employer has when they take you on and gives them another good reason why they should be employing you.

A word of warning, if you are going to work on site, you may want to invest in a lock for your tool box.  Tool theft is not uncommon on site so ensure you keep your tools as safe as possible.

Offer to work for other sparkies to get more experience

Sitting at home doing nothing is the worst thing you can do.  We cannot recommend highly enough the training and experience that counts.  This is why we have covered this again in our article.  Although working for free may seem a little unrewarding to begin with, you will get to where you want to be much quicker.

Impress an electrician enough by offering your services for free may well land you with a paid position far quicker.  Established electricians have good industry contacts and if you are willing to work hard and learn the trade, they will often know someone who is looking for a good electrician.

Conclusion

So there we have it, our top tips for success after qualification.

Remember gaining your qualifications is just the start of an exciting career as an electrician.  Your career will be filled with non-stop but highly rewarding learning.  No electrician out there will claim to know it all, but electricians that work hard (and play hard!) will reap the benefits.

Students looking to become self-employed may find it beneficial to go on some short business courses and carry out research about their local area and figure out the best marketing strategies for their clientele.

Remember you are a businessman first and an electrician second.

 

Categories: what now?

What Happens If a Customer Doesn't Pay!

Posted by Joe Bennett on 11th September 2013

 

Practically every person who is self-employed will at some point in their career come across a person or company who doesn't pay their bill.  Generally non-payers fall into one of the following categories:

• Will pay eventually (but it makes no difference to them whether they pay you now or next month)

• Have no intention of paying and will give you the run around

How to give yourself the best chance of being paid

Agreeing payment terms as a small business can be tricky.  On the one hand you will want to please your client rather than run the risk of losing them. Setting up a system to encourage your clients to pay on your terms can save weeks of waiting and constant worry.

Draw up a business agreement

The key piece of advice is to be business like with every client no matter how nice they seem to be or how much you need the work. One of the easiest ways to do this is to have an agreement in writing over how payment is going to be made before the work begins. If you find that a client refuses to sign any kind of agreement with you beforehand then this is a first warning sign that they may not have good intentions of paying for your work.

Your business agreement should list the customers’ requirements and ask the customer to confirm by indicating yes or no that these requirements have been met.  Ensure before work commences that the customer is clear what you will be doing by showing them these requirements and asking them to sign to confirm that this is what they'd like you to do.

It is always wise to invoice timely and accurately for your work so your customers know you take being paid seriously.

The step by step guide to obtaining payment

Here at Trade Skills 4 U we decided to do some digging to find out what the rules are with regard to late payments and what you can and cannot do when it comes to chasing money owed to you.

There is good news for making your plea for payment heard however. On March 16th 2013, the UK became one of the first EU countries to implement late payment legislation. It aims to make pursuing payment a simpler process right across the EU reducing the existing culture of paying late and making payment on time the norm.

All these methods are contained in the late payment legislation so you can be sure you are acting in a business-like manner using the most up to date methods available.

• Make sure you know when your payment is officially late

The law says that payment is late after 30 days for public authorities or 60 days for business transactions.

The days are counted from

- When the customer gets the invoice

OR

- You have completed the works agreed

In order to reduce the waiting time, it is better to agree a payment date on your agreement as discussed earlier in this post, as this will determine when your payment is late.

• Adding interest

If you have waited a reasonable time you may decide to claim interest. You must ensure you charge the correct rate. Currently this is 8% plus the Bank of England base rate for business to business transactions.  This is known as statutory interest.

When you have calculated statutory interest due on the amount you are owed, send your customer an updated invoice to reflect the new amount they now owe you.

Debt Recovery

This is a good way of claiming additional costs occurred by chasing the debt such as telephone call charges, postage costs and your own time etc.  The amount you are able to charge depends on how much your customer owes and is set by the payment legislation.

- Up to £999.99 – Fee of £40

- £1,000 - £9,999.99 – Fee of £70

- Over £10,000 – Fee of £100

• Small Claims Court

This is a last resort after trying the above methods.  You will have to pay a fee to bring your case to court and you may lose this fee and lose your case, however for claims below £10,000 this is the most cost effective option for taking legal action.  You may be able to claim court costs back if you win the case, however the judge will need to see proof of the efforts you have made to recover the money owed to you prior to court action.

- Your client must respond to your claim within 14 days of receiving it.

- If they do not respond then the court will order them to pay.

- If they pay or offer you an amount you are happy with, you need to inform the court that you are withdrawing your claim.

- The first step after winning the case is to find out how much your client can afford to pay.

The court will offer additional court orders for this such as:

- Sending bailiffs to collect payment

- Getting money deducted from wages

- Freezing assets or money in accounts

- Charging the persons land or property.

Conclusion

This article is not intended to constitute legal advice.  It is a simple guideline to ensure you are aware of the correct processes to follow to give you the best chance of being paid by a difficult client.  If you are in any doubt about any aspect of chasing money, you should seek advice from either the CAB or a solicitor.

Remember most customers are perfectly fine and pay on time every time.  The few which do not often pay when the threat of further action and charges loom.  This article exists to demonstrate a clear pathway which can be used to ensure even the worst clients have to pay eventually.

 

Categories: no pay, late payment, debt recovery, charging interest