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bobbygedd
06-20-2001, 02:45 PM
its getting to be a bit of a nuisence doing once a month billing. i mean the bills go out at the end of the month, some people dont send them in till 3 or 4 weeks later. that means ive waited 7 weeks to be paid for that first cut. gets to be a bit much on the wallet having to finance the business and do work for people on credit. ive been thinking about sending out half the bills at the middle of the month, but for the whole month. example: do 2 cuts, 15th of the month send out bill for 4 cuts, by the end of the month when i complete the 4 cuts the check should be there and we r even. what do u all think? any other ideas?

curlawngreen
06-20-2001, 03:28 PM
Why don't you get some commercial accounts so you can wait till they want to pay you. They may even say we are going to pay after 3 months and you are into them for 6 weeks already. Can't tell them to take a hike can you.You should have enough reserve to cover a couple of months if you are really in "business"

Fantasy Lawns
06-20-2001, 03:39 PM
cash flow is a killer ;->

we send out on 1st of Month ......due by 20th .....cronic late gets 1 warning ......than late fee of $10 ....or suspend service .....it's too hott ...not to get paid on time .....Good Customers are like Flower Beds .....You gotta weed em'

ALL NEW Customers need to be "Educated" from the Start

bobbygedd
06-20-2001, 03:39 PM
well, that is not the piont. i dont know any other contractors that work on 6 or 7 weeks credit besides us. just looking for a better way

jeffyr
06-20-2001, 04:45 PM
Bobby,

I started out this year with a flat monthy price (all services performed last year totalled and divided by 10 equal payments--march through december). The first payment was due by March 30th, and was billed on March 15th. Since the work didn't start until the end of March, I was ahead 1 payment from everybody giving me startup cash for this year (each month I bill on the 15th net 15) I did have to verbally explain it to a couple of people (why am I paying you when you haven't done any work yet ?) but I didn't lose anybody and only had 1 say she liked the old method better.


Hope this helps.

jeffyr

smburgess
06-20-2001, 05:02 PM
I'd say performing the work, then invoicing at the end of the month is pretty much how it's done in this business. You do have some real small LCO's that actually go up to the door when their done to collect! They must have a real cashflow problem! One thing I do is at the bottom of the invoice I put a line saying that if it's not paid by XX there will be a 1.8% finance charge assessed on that date. It works pretty good. That way if they are late in paying, at least you are being compensated. My "pay-as-you-go" accounts are due by the 15th, and my yearly and commercial are due by the 30th. I even put it my proposals, so it is never a surprise!

TGCummings
06-20-2001, 07:07 PM
I do it pretty much the way you're suggesting, bobby. Starting this year, I try to start passing the bills out by the beginning of the third week of the month, with a due date marked 15 days from the time I make the bill (generally from the 30th to the 5th of the following month). In the past, I usually got paid at the middle to end of the following month. Now, most customers get me paid for the full month before the beginning of the next.

The change has worked out real well in my case...

-TGC

Vandora Lawn & Landscape
06-20-2001, 07:12 PM
I bill monthly on the 15th of month. That helps alot in april. I get my first checks after 3 weeks of work. 95% of my customers pay in 10 days. A couple after that, the rest a little chasing helps. Occasionally a customer will stop me while I'm cutting or doing work and give me a check. I don't complain, but I don't ask for the check.

thelawnguy
06-20-2001, 10:06 PM
Originally posted by bobbygedd
well, that is not the piont. i dont know any other contractors that work on 6 or 7 weeks credit besides us. just looking for a better way

Unfortunately this business is fairly unique in that you return at regular intervals to perform the same services over and over-unlike say, a roof every 20 years or painting a house every 5.

Maybe divide your customers into 4 groups, bill each group at a different time ie first week, second week etc then your cash flow will be more evenly distributed.

But my gut feeling (based on other threads and posts made by yourself) is that you lack the experience to properly manage your finances. Maybe a night class at the local CC would be in order?

guntruck
06-20-2001, 10:18 PM
Apply late fees and enforce your payment methods politely with consisten phone calls, that will make a difference. If you have continual problems from the same client just cancel and get another to replace him or her.

1MajorTom
06-20-2001, 11:54 PM
Billing has never been an issue for us.

We have a little over 90 customers.
Yeah, we have about 20% of our customers that we bill monthly which I send out at the end of each month. To qualify to be a monthly billing customer, the total must be $275.00 a month or more and even then they still sometimes want to pay weekly. Also any commercial account is also billed monthly, and those payments always run late. Sorry, but a weekly cut customer that is charged $35.00 bucks is not worth waiting for all month for only $140.00 bucks.
Sorry, don't mean to ruffle any feathers here, but monthly billing is a pain to me. We have not had one complaint from any customer about paying weekly. Heck, I think they prefer it better. Much easier and painless to write out a check for $45.00 bucks than it is to write one for $180.00 plus tax.

Our customers are pay by the cut. It's so simple. So easy. No waiting for checks. No going to the door. We cut once a week. Our customers know that. They see their lawn cut. No invoice needed. No detailed billing needed. We cut the grass. They send their check and within three days at the latest, we are paid.
We have a constant flow of checks each day. Open the envelopes, go to the computer, mark them paid, done in five minutes.
(We used to go to the door and get paid on a few customers. We stopped that crap also. Just don't have time for it. Our customers understand that we are busy)

4 banks runs a month. One a week. Deposit the checks. Constant money coming in. I am a very organized person. This way works best for us.


For anyone going strictly the monthly billing route, I like Bill the Lawnguy's suggestion about grouping the customers into 4 different weeks, so there is a billing cycle each week.

Lawn DOG
06-21-2001, 12:56 AM
My situation sounds alot like jodi's except we do all of ours monthly. Cash flow can get tight but that's only because if there is any surplus of funds I always write myself a big fat bonus check(ahhhhhhh). I have considered billing our residential accounts bi-weekly but I think people enjoy writing one check a month. I know I do.

bobbygedd
06-21-2001, 03:25 PM
yes bill, i am still learning, i learn every day and am thankful that i am able to. in this business, as im sure u know, u have to be a laborer, salesman, supervisor, loan company, collection agency, and so on. after all these years the one thing that still is the most important is getting paid, and being paid on time is the second most important. alot of guys say, well if they dont pay you, just move on. no way, my gut feeling is that if a mugger lifted your wallet and started running, u would chase him down and....., well why is somebody who dont pay their bill any better? i dont know if u have a family to feed , and a mortgage to pay, but i do. and waiting 3 months is out of the question, the longer u wait the harder it is to get paid. how on earth do u eat and pay your bills? as far as managing my finances, i do just fine, i dont let people step on me by letting their bill go 3 months unpaid, heck , i had a guy 5 weeks overdue, asked for my dough, it turned into an argument, to the police station, got my money, problem solved. thanks for the advice there bill

KindGardener
06-22-2001, 01:17 PM
I've only been at this for a year, and it has taken me this long to get my billing "dialed in". I have all 95+ accounts set up in QB Pro2000 as "memorized transactions". About 1/3 of my accounts get billed for extras (pruning, fertilizer, etc). This weekend I'll input the amounts to bill each one & batch print the whole bunch on the 30th.

My daughter & I stuff invoices & return envelopes & I mail 'em on the last day of the month. I found that clients LIKE to get a bill at the same time each month. I used to bill on a weekly rolling cycle (like THELAWNGUY suggested), but that was a bookkeeping nightmare for me, and probably confusing to them.

My invoices states that "Payment is Due on the 7th" (yep, the 7th). At the bottom of each invoice are the billing terms. (due on the 7th, delinquent on the 15th, $10 late fee for payments after the 15th). Yes, I KNOW my late fee is not protected by law (it's more than the 1.5% or whatever it is) , but that's what I ask for - so far, the few accounts that I've charged have paid it).

About 2/3 pay by the 7th, 3/4 by the 15th, 90% by the 25th. I'll make friendly reminder calls those that aren't in around the 20-25th (I'll call this weekend).

Follow up calls are a pain in the a**, so accounts that were delinquent last month, and again this month will get the $10 late fee on the next bill. I've learned to adjust to the real-world payment patterns of my clients - I only charge late fees to those that are more often late than not. And I KNOW that charging late fees inconsistently is maybe a bad idea... And I've only had to "cut off" a couple of accounts, and right now, I consider myself fortunate that only one account still owes me $ for a May (or earlier) invoice.

that's my $ .02

HOMER
06-22-2001, 04:45 PM
I bill monthly. 99% of mine are set up this way. I do get small LCO syndrome with the seasonal people though. If they don't want to pay me year round I would like my money when I get done...........thank you. Does that make me "small"?

Anyhoo..........I get a steady flow of checks all month too......most come in early and there is no problem and some trickle in like a lazy employee. I check the payment history and it shows me that they are consistent anyway.

I don't have a cash "flow" problem. I have a "Dam" problem. None of it seems to pile up in my bank, just everybody elses.

gusbuster
06-22-2001, 11:10 PM
I rarely have a problem with late payers. I do do monthly billings, but drop off bills as I complete the run for the month. My system wouldn't work with weekly setups, but I do get a constant cash flow except for a week to week and a half.

Besides charging interest on late invoices, I now write a letter to the client stating that I will only perform work if the month is paid in advance. The middle of the month, I bill them for the next month. If, by the 1rst of the new month I haven't received a check, the yard is not serviced. I also drop a little note explaining why it wasn't serviced.

Just make this point with people. They wouldn't work for a company who doesn't pay them on a timely fashion. Why? A mortgage, groceries ect..

John

Southern Lawns
06-23-2001, 02:21 AM
We send em out on the first and they are due on the 20th. Same clump of people that come in after the 20th every month. So far no non payment! I think the punctually challenged group think that the 20th means that you put it in the mail Around the 20th and hope for the best. Gonna put a note on the invoice stating that payment MUST be received before the 20th and see if that helps. I'm just not sure there is a much better way to deal with this situation. Will follow this post to see what ya'll come up with.
Raymond

PrimeGreen Lawn
06-23-2001, 08:18 AM
Originally posted by smburgess
You do have some real small LCO's that actually go up to the door when their done to collect! They must have a real cashflow problem!

As I hope you know, you just about described over 50-60% of members of this board, including myself (at least 2 years ago). These people are usually TRYING to get started somehow, and if thats the way they want to do it, good for them! Don't tell me you were never in that situation.

George777
06-23-2001, 09:19 AM
My partner and I have most of our customers leave a check the day of service. We will leave the invoice under the door mat. Most have got it down and for the first month we will call the night prior to remind them that tomorrow is their service day. We do our work and collect our money, Have not had any problems.

When I get home that night I put the invoices into the computer and mark customer paid in full. Only a few customers get billed monthly. I feel the sooner you get paid for your services the better. Some people might forget about the mailed invoice and then you got to make that dreaded call.

Maybe my system is to easy but why complicate things and wait for your income when you can get it after your service.

KirbysLawn
06-25-2001, 05:08 AM
I send invoices on the first day of the month, included is a SASE with the invoice. The due date is the 15th of the month, works well for me so far.