When a homeowner embarks on the journey to add a pool to their home, they are likely to feel a combination of excitement and concern. After all, it is a large investment in both time and money. This is why, to ensure transparency and trust, the contractor must clearly communicate the many steps required to successfully complete the project and establish a payment schedule based on this plan.
Typically, there are payments due at the completion of each step (or milestone) of the project. The number and description of these steps can vary depending on the project type, timing, and individual contractor’s scope of work.
Every project is unique, and company procedures may differ, but a typical billing schedule might look like this:
Design deposit: 5%
Contract signing: 10%
Excavation/Shell: 25%
Plumbing/Electrical: 25%
Project completion: 35%
In a cash payment model, the Customer receives an invoice after each step of the process is completed. Payment terms are based on the contract that was created prior to beginning the project. This process can be complex and may require a significant amount of back-office resources, including creating and sending payment requests, following up with the Customer, and processing payments.
When financing is involved, the milestone payment process can become even more complex, but this does not have to be the case. In fact, a technology-based financing program can actually make the billing and payment process easier.
For example, the GreenSky Merchant Self-Service Portal (MSSP) includes a MultiDraw Staged Funding capability. It allows the contractor to build a payment and funding schedule that aligns with the milestones contractually agreed to with the Customer.
As milestones are completed, the contractor submits transactions using the MSSP or the GreenSky Mobile App. The Customer is automatically notified and, with the Customer’s authorization, the contractor gets paid at each project milestone. The process is similar to cash-based billing; however, payment requests and funding are largely automated.
The installation of a pool or spa is a significant investment, and homeowners are likely to seek financing to help them achieve the results they desire. Creating, understanding, and following a milestone-based billing schedule is crucial to avoiding surprises and maintaining good relationships with your Customers.