Collecting $ after job is complete

[JimLewis]

Hi,

I am fairly seasoned in this business. We have a very large residential maintenance business. But we just began landscape installations last year and I am running into some challenges that I am not familiar with handling. Could use some advice.

When we do installations or renovations for people and the total is over $500-$1000 I typically get 1/2 down and 1/2 upon completion of job. I also have the client sign a contract, which includes these terms of payment.

I never have a problem getting the half down. And we don't begin work without it. My problem is collecting the last half when we are done. A lot of times the client isn't home when we finish the project so I end up leaving an invoice or sending an invoice in the mail. Sometimes they wait several weeks or even a month before they send a check. That kinda hurts when you are waiting on a $2000 check.

I hate to bug them. I feel like it makes us look desperate for cash. And I don't want to create that impression. But I also gotta pay my guys and keep the business running smoothly.

So I guess my question is this; how long before you begin to bug someone for the final check? And are there any better ways to assure we get a check sooner rather than later? Or is this just part of doing business?

It's new to me because with our lawn care accounts 60% of them are on AutoPay and the others are never late (I don't tolerate late payers for long.) So this waiting for money, especially large amounts, is new to me.

[Stonehenge]

We collect 20% to reserve a place in schedule.

We collect 50% the day we start.

We invoice the remaining 30%, net 15 days.

Day 15 they get a call to see if everything is ok, as they hadn't sent payment yet.

If nothing in 2-3 days, they get new invoice with interest added on.

Hope this helps.

[Lanelle]

If it was a sizable job, schedule a post-installation meeting with the client to inspect and go over care issues with the client, and (oh by the way, collect the balance). Use this opportunity to educate them regarding the care of their new landscape and plant the seeds of ideas for the next phase that you'd like to sell to them. They will appreciate the personal interest that you show and you should walk away with your money. If not, you'll know why not.

[kris]

I think lanelle has it right...I think you should do a final inspection with them regardless and what better time to collect your money

[John from OH]

Lanelle has it right. We always meet with the client ASAP after an install. During our sales presentation, we let them know there will be a meeting upon completion of the project to answer any questions and to go over watering instructions and care of the project. We also let them know the final payment is due at this time. Construction projects cover product guarantees. When our office manager sets up the meeting, the client is given the final balance due and reminded that the final payment is due at the meeting. We also tie our guarantees to the final payment, if the payment isn't made on time, no guarantee is offered. Any client disatisfaction uncovered at this meeting can be quickly corrected. It's a great way to build future sales and to get immediate feedback on the project.

[GroundKprs]

I like StoneH's 20-50-30 approach. Around us norm is 1/3 down at sale, 1/3 at start of work and balance on completion. Less is hanging then.

[Lanelle]

Some states have laws limiting the amount of downpayment that can be collected prior to doing the work.

[bobbygedd]

funny but i had this argument with a customer. this is the bottom line, half down, balance due upon completion.

[paul]

You are so lucky :) Lets see you get a check up front to put them on your books, then you get a check to start, and after you finish!

Me I don't get anything to start, I might get a check towards the middle of the job(if it's a big job) I get a check less 10% at the end of the job and if I'm real lucky I will get 5% before the end of the year and the last 5% at the end of the years time.

And you say you are having a hard time colecting?????

[gusbuster]

Are we all licensed contractors?
Speaking only for California, we are only allowed 10% down payment with a signed contract. Really doesn't cover any of your materials cost. So what I do is break it down into projects-steps. You don't pay, I don't continue work. I'm sure some of you can use this document.
John

[JimLewis]

Well in California you are run into the ground by Democrats who want to put all sort of rules, regulations, tests, requirements, etc. on businesses. Next time vote GOP or Libertarian.

Sorry, I had to get that out.

I can't speak for the others, but we are fully licensed, bonded, insured, etc. and in Oregon there are no laws saying how much we can or can't take as a down payment. But if there were I'd do the same as you.

On really big projects I ask for 1/3 down, 1/3 when we are half way done, and the remaining 1/3 upon completion.