Do any of you accept pre payment on contracts?

[AllSeasonsAllReasons]

If so what are the pro's and con's of this?? Do you offer better rate for pre payment? Thanks Cory

[Fantasy Lawns]

I have two customer's that do this one pay's 2 months upfront the other pays a full year ^-- I wish everyone did this ...no problems last 3 years, just do the job that was promised ....and they pay for extra's when reguested

[lawrence stone]

What I do is demand that all new residential jobs pay the first monthly installment payment up front and the rest are due the 1st of the month b/4 any work is done. NO payment NO Stone. The fee for early cancelation is $200.

When I send a proposal to a new account they must remit a check for the first month service with the signed proposal b/4 I will start any work.

I also run a TRW credit check on any new accounts. If they have a bad credit history I give them one the opportunity
to make one pre-payment for the entire season with a 10% discount. Then I wait for the check to clear b/4 starting any work.

In the past 3 years I have brought home 100% of my receivables.

[Edited by lawrence stone on 03-14-2001 at 10:23 PM]

[Charles]

Thats a good idea Lawrence. I had an account that was paying monthly. What a pain that turned out to be. Because some times that would wait until the middle of the next month to pay for the previous month. I had to dun them to even get that. By then you have a month and 1/2 invested in the yard and if they dont pay you are screwed good. too much to worry about. They even sometimes went 3 weeks. They are in charge at that point. Luckily I have only had a few monthly accounts over the years.

[joshua]

i try to build trust with my customers on cutting. i tell them if they want to pay every cut they can or if they want to pay once a month whatever suits them better. most go with once a month, they always pay, because the product i deliver is top the list of quality in my area. and they want me back.

[lawnboy11]

I offer a 10% discount on the spring clean up only. This gets a good response and gives me capital for the spring purchases, etc. I don't want to discount everything 10%, no thanks, I'll take that 10%. After that I bill at the end of each month for work done that month, but I expect payment within 15 days or the late charges begin to apply.

[Charles]

Joshua, doing a great job and getting paid on time or at all are not always synonymous. Some customers are just jagoffs who think the lawnguy is last on their list when it comes to bill paying. There problably late on all their bills. I rarely have a customer like this but after 11 years in the biz you run into all kinds. And they wouldnt know quality if it hit them in the face. But i am glad you think you are so special that this will never happen to you.

[lawrence stone]

Charles can't you tell Joshua is a teenager?

I can for many of these young guys are too lazy to hit the shift key.

[lee b]

Either Joshua is really lucky or doesn't do much business. I have never seen a business dealing with open accounts who hasn't been taken, even liens aren't a 100% guarantee. There are people just waiting for the oppurtunity to get something for nothing. Good luck Joshua, I hope you never get ripped-off.

[kutnkru]

We offer a 10% discount for those who are willing to pay for the season in advance. The only disadvantage is that if they want to cancel the contract, that we have to have their funds available for reimbursement.

I am going to look into the TRW for new clients starting yesterday. We have not really started signing contracts for residential clients.

STONE:
Thank you for the insight. Do you think that if they couldnt pay for the entire season upfront that two installments would not be out of the question?? Im refering to half up front and then the balance due before the end of the 4th month.

Thanks again.
Kris

[Fine Lines Lawn]

I offer mowing customers a 10% discount for prepayments for the season, which I calculate on 25 mowings. These notices go out the first of January and the responce has always helped keep the bills paid through the winter. These customers always get top priority and I've never had to refund due to service cancellation. This might be an idea for those concerned about "Friday mowings."
BTW, I've had special calenders made where every day is Friday:)

[Eric ELM]

Welcome to Lawnsite.com and I can see why your company name is Fine Lines. You lay down a nice looking striped Line. :)

[Fine Lines Lawn]

Thank you for the referral to this site. I registered just this morning, and as soon as the paperwork was finished tonight, I started getting lost in the forums. BTW, I went to your site, and you certainly create your share of Fine Lines, as well. Thanks for your nice work on this site.

[Kevintree]

Hi folks

A long time ago I was told to use eight percent vs ten percent Was told at the time clients would not be aware of diference. After doing such for eight years found to be true.We end up with extra 2 % in OUR pocket

Kevin
Kevin G. Manning
Manning Tree and Plant Care
PO Box 275
Hewlett, NY 11557
http://www.kevintree.com
Phone - 516-569-5887
Fax - 516-569-5898
Email - kevintree@aol.com

[GreenQuest Lawn]

I offer a 5% pre-pay discount. Not many take it but they appreciate the offer. When they do it just saves time and postage sending out them invoices.

[tpirobert]

For Residential accounts only I offer pre-pay for 10 and get 1 free mow/trim. Helps with winter cash flow and the money savvy customers call me asking for it. Just remember to look at how future cah flow is affected.

[jeffex]

A man who works at my local Ace hardware told me a story
of a guy in Fla. who had over 400 customers in trailer
parks all on pre pay. The ace guy moved to Fla. yrs ago
and the guy came to his trailer as soon as he moved in.
his price was $5 per cut cheaper than anyone else $400
for the season of 40 cuts. $160,000 invested for a season
is a nice bonus. If I ever go full time I may try this
method to corner the market in my area. I understand
this fella had many mexican and cuban workers and they
did most of the work.

[kutnkru]

My uncle did this after he sold his business in the late 80s. He had been traveling to Flroida every year for almost 20 years the last weekend of October.

He had a crew running here in NY and then he had a crew running down there in Florida. He cut six months a year up here and the other six months down there.

I remember him saying that people jumped at the $30 a month for their lots to be maintained. After reading your post I yunderstand his logic -LOL. Guess he wasnt so crazy afterall.

This buds for you uncle Chuck!
Kris

[lawrence stone]

Originally posted by kutnkru

STONE:
Thank you for the insight. Do you think that if they couldnt pay for the entire season upfront that two installments would not be out of the question?? Im refering to half up front and then the balance due before the end of the 4th month.

Kris

There are two types of residential customers.

Ones that have money in the bank and ones that are
living week to week.

If they can't pay all up front how do you expect to get paid in split installments?

[jeffex]

In my pressure washing business the whole season is
practically driven by the good ole' TAX REFUND. People
know what they are getting back in a tax refund and all
thier pent up cabin fever makes them want to spend spend
spend. I just here to oblidge them. Many could pre-pay
in April

[Mowin4cash]

I feel just the opposite about pre-payments. I would not want a customer to pre-pay, I'd rather go into the office everynight with my pockets packed with checks. It would seem like I was working for nothing all day with no wad of money/checks to carry around. On the flip side however, it would be nice to write one check for all the truck payments for the year though!!!!!!!

[lawnman_scott]

I do all my billing monthly, dont think i could get anyone to pay for the whole year. Who would pay a bill a year in advance? not I. I get them to pay in advance one month.