Have you ever had to chase a payment from a job you have worked on, or missed out altogether? Or found yourself ripped off by someone carrying out some work for you at home?
Launched recently, Sydney based start-up CheckVault is a free and secure payment service that offers peace of mind by taking financial risk out of the equation whether you are buying or selling. The service has launched across Australia following a two-year beta test stage that has seen a 100% success rate across customers and businesses.
With nearly 9,500 Australian businesses going under in the past year alone, racking up losses of up to $7bn in large part thanks to late payments from customers to businesses – there has never been a better time to launch this service which aims to help both consumers and businesses.
Once a quote for a job is submitted, payments are secured and the funds are held safely in the CheckVault via an escrow arrangement with ANZ Bank and Perpetual Corporate Trust until the work is complete, to be released only when both parties are satisfied. When payment risk is taken out of a job, both parties win.
Founder Kieran Martin, a Chartered Accountant, launched the service after seeing first hand the effects that late payments had on many of his client’s businesses. Spurred on by experience from close friend Nick Ogilvie, now a Business Development Manger for the company, Kieran started CheckVault to provide a simple, safe and secure way for customers and businesses to reduce the risks associated with transactions.
The construction industry has been particularly affected by businesses losses, and whilst we hear the argument about dodgy builders ripping off customers everyday, this flips the argument on its head and shows the impact that late payment has on Aussie businesses – and how CheckVault can benefits both sides.
We are very lucky today to have Dale Vine, one of our favourite stars from The Block, having a chat with us today about how it all works and how excited he and wife Sophie are with the impending birth of their first child!
Dale, can you tell us about your business and what you have been doing since we saw you on The Block?
I run my own landscaping business and have been doing that for about six years out on my own, predominantly around the Geelong region. Since The Block I’ve been doing landscaping and a few other bits and bobs; I’ve got management this time around after the third series I’ve been on. It’s been really good because I’ve had to take on a few different roles and get experience that I previously wouldn’t have tried my hand at. It’s been a bit of a whirlwind.
How do you generally set up a payment relationship with a potential customer in a tradie business and what kinds of things can go wrong from both sides do you think?
So I generally send an invoice out that has the dates on it that I require. Fifty per cent of the quotes price is paid upfront, which basically covers most of the material to do the job. So at least you can go out and buy things and are not out of pocket straight away.
The part that you’re risking is that the money you’re owed is generally labour. You can get to the end of the job and be waiting on the money and it doesn’t come through on time. That’s when you start getting into risky grey areas, living off credit cards and things that aren’t really your money and that’s how people get into a lot of trouble when the money isn’t coming in really quickly.
How have late payments affected you personally? What happened and how did you handle it?
I’ve been pretty lucky. Late payments haven’t really affected me to the point where I’ve never received the money like a lot of small businesses that have had the misfortune of that happening.
It definitely does affect you, even if I give out my invoice for the remainder of a job to be paid within seven days from the work completed, if you don’t get in within that seven days, that’s when you know feeding yourself and your family becomes an issue and you start having to rely on credit cards until that money comes through. Instead of using your savings, which is money you’ve earned, you’re using the banks money and there’s interest and stuff involved and all that, so you start getting behind.
Can you explain what CheckVault is all about and how it works?
CheckVault is basically the solution to these late payments occurring, and I suppose the whole thing is set up to prevent that thing from happening to small business. For tradies, CheckVault acts as a third party between the client and the tradie. The tradie submits the quote to a client, who pays up front, and the funds are locked away in CheckVault until the completion of the job. When everyone is happy, the funds are released on time and the tradie gets paid as soon as the job is finished.
It’s peace of mind for the tradesman and gives them lots of incentive to get on with the job and get it finished. For the client it gives them a discount and makes sure their tradesman doesn’t go and start another job to sort of get a cash boost throughout. It’s a really good system and it definitely works for small businesses.
How can you see it helping consumers as well as trades?
The first thing for the consumer is that they can often get discounts because they’re guaranteeing the money up front, so that’s something they’ll see immediately on the invoice.
The other thing is that consumers should really have the money there, you know, before they take on a trade to complete a job. They shouldn’t sort of flirt on waiting on a work payment or something else to come through to be able to pay for the tradesman employed to do the job.
It gives them peace of mind that the tradesman will do a good quality job throughout, and he’s not going to be starting a job, putting the tools down, and then going off and starting another job in case one doesn’t get paid straight away. I know it does happen a lot. Tradies do that because they invest a lot of money into the jobs they take on and they have to guarantee that there is at least some money sitting there waiting for them to come in. So with CheckVault for the consumer it just means that the tradie is going to stick around and the incentive is there for the trades to get your job done and finished as quick as possible.
What situations would you recommend people use CheckVault for – both consumers and trades?
I think any small business should really be using CheckVault. If you are using money out of your own pocket to invest in a job through materials and staff, and late payments don’t come through for a while, people still need to pay their employees. If you’re still waiting on payments, then that stuff all comes out of your own pocket or off credit which is what you definitely don’t want to dabble in. So it gives the trade peace of mind that once the job is completed the money is there and they can pay their employees and focus on the next job.
It gives you a lot of free time back. You’re not worrying about invoices unpaid at the end of the day when you’re home and clock off. Hopefully it gives a lot of small business owners a few hours back in their evenings to relax again, the way it should be.
On a personal note, congratulations and how is Sophie going with the pregnancy, very close now!
Yeah, so we are close! I think mid-December is when they’ve given us that it’ll come, so it’s only probably now until then and a week or so later, but we’re hoping before Christmas so we can sort of get home and settle a little bit before Christmas day comes along. But you never can guarantee these things so we’re excited to meet whoever it is.
You know, the next part of our lives is in parenting which we’ve never done before, and I think the first kid is very exciting and we’re definitely pretty excited to meet him and start caring for him.
My birthday is the 27th of December and Sophie’s is the 30th and so there’s probably a chance of it landing on one of those or Christmas and so yeah it’s a bit like playing a game of battleships!
How do you think you will juggle parenthood and running a business?
It’s obviously going to be something new to me, but I suppose the running the business part shouldn’t really change too much. It gives a real incentive for something to work towards. You’ve got a baby at home that’s relying on you for income and to support it so yeah we’re really looking forward to the parenthood part of it.
It’s just one of those things, it’s going to be a little bit of trial and error and asking a lot of people that we know that have been through it before. So yeah, we’re excited to give it all a go, and see what works and what doesn’t. But as far as business and family go together, I mean it shouldn’t be too much different to running a business and having your wife to come home to I wouldn’t think; just another friendly smiling face to come home to the end of the day.
Thank you Dale! What a beautiful interview! We are very excited to see Dale and Sophie’s bundle of joy too! We love a new baby at Recycled Interiors. And besides that, we think CheckVault is an excellent concept and one which will really make a difference in the construction industry.
You can see more about how it all works and get involved here
Have you had a bad experience as a tradie or a customer? And do you think you would use this?
Helen
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