billing question

[HOMER]

Maybe I should have posted this on the business section but I know everybody bills somebody.

My question:

I put some of my customers on a 30 cut plan..............OK.

If the yard I cut is a $40.00 yard then I multiply the 30x40 to get $1200.00 for the year...........................OK.........Got it?

$1200.00 div. by 12 months = $100.00 a month..........right, ya with me so far? I'm sure you are.

IF I MISS A MOWING IN ONE OF THE MONTHS THAT I SHOULD CUT 3 TIMES DO I?

1. Take $40.00 off and invoice for $60.00 or
2. Invoice for the 2 mowings at the per cut price? $80.00

If any of you are faced with this dilemma then tell me how you handle it.

Most of the time I bill the per cut price for the # of times I've cut, whether that's fair ir not I don't know.

[Kent Lawns]

The short answer is don't skip them. Edge, do some trimming, whatever.

I tell my customers they're buying a spot on one of the routes. They pay either way.

Anyway, bill them for the 2 cuts. You'll find a place for that money and besides the 2 times you are cutting it's like 110 degrees.

[carl28]

don't take this the wrong way but where do you cut in the northeast a contract is a contract if I bid the lawn at 40 dollars per cut I bill 40 dollars per cut at the end of the month that year round billing crap only works if you have a million dollars in your pocket for those of us who don't i bill for work completed or on a monthly basis for a bid regardless of work required they won't send me a check for $40 if i have to cut twice times in one week.

[crazygator]

Since it seems that you are billing on a 12 month basis then just deduct it from the 12 month paying plan. If not then you may confuse your customers.

[HOMER]

Maybe this is harder than I thought!

Maybe not.

I just figured it out. At the end of the year I will have overcharged these folks.

For instance.

If I am charging a guy $1200.00 per year and miss 1 cut in that years time then his total for the year should be $1160.00.

My way of doing things has been wrong........I would have charged him $1180.00..........just had to take the time to decipher it.

[Chopper Lover]

Homer,

If it is an "annual" contract I don't deduct for a skipped mowing and I don't add for more than one mowing a week (if that were to ever happen) or extra mowings at the end of the season above 30. In a way you are doing them a favor by breaking it down over 12 months because it allows them to budget their money rather than get slammed a few months out of the year.

If it is a "per mowing" contract I guess you will have to give a reduced bill at the end of the season, especially if you were going to add more money to the bill for each mowing over 30/season.

I think Kent makes a good point about stopping by and doing something, even if it is just a trim and/or blow of the walks and patios to keep the place "perky".

Originally posted by carl28
don't take this the wrong way but where do you cut in the northeast a contract is a contract if I bid the lawn at 40 dollars per cut I bill 40 dollars per cut at the end of the month that year round billing crap only works if you have a million dollars in your pocket for those of us who don't i bill for work completed or on a monthly basis for a bid regardless of work required they won't send me a check for $40 if i have to cut twice times in one week.

Carl:
From your post it does not appear you get the concept of the annual contract. Annual Contracts provide a specific maximum amount of service for one season for a specified price to the consumer. It is guaranteed income even if there is a drought and the grass doesn't grow. In Homer's situation he has at least $100 coming in EACH MONTH of the year. That is just from one yard. If he has 40 yards in the same plan that is $4000/month no matter what!

So what does that do for Homer? Even in January when Homer is watching TV and the others are out searching for work, Homer is still getting paid for mowing thier lawns that may have a few inches of snow on them... Not bad for a bunch of "Year Round Billing Crap"!

Be Safe!
Mark

[CSRA Landscaping]

Wow, Carl! That stream-of-consciousness reply sort of left me dizzy! I mean, that's really got to be a talent! I must admit, however, that I didn't get what you meant, except that you didn't like what Homer was saying.

[lawrence stone]

Carl do yourself and us a favor. Take English composition class at your local community college.

I frankly can't understand anything you have written today.

[HOMER]

That crap is what allows me to spend my days on Lawnsite during the winter months. We may not get smow but the way it works is in the summer I am loosing money. I cut 3 or 4 times but only bill for a set amount, which is lower than it would be at the per cut price. In the winter when I only go once I have actually accumulated a credit so that they "owe" me the extra.

It's just averaged out.

When I miss a cut though I cannot hold them to paying me the full amount. Somewhere along the line you have to balance the books so to speak. They don't want to pay you for nothing. It would be like doing things on a per cut basis..........not cutting the yard but billing them for it anyway..................I don't think too many people would go for that. If I didn't have the time to stop and cut it, which is what we are most efficient at, then I sure don't have the time to do anything else. Sometimes you run out of month!

This goes back to the 10 day crap. My weeklys get cut on time, my every now and thens are the ones that upset the apple cart. They're the ones that need dumping..............just too nice of a guy to tell them.:D

Are you with me so far? Life in the fast lane........surely makes you lose your mind..........life in the fast lane...uh huh!

[kris]

We always show up even if it doesn't have to be cut....This may not work if they are not full service accounts( then you can spend time in shrub beds etc) ...like said before ..if it is a per cut contract then you may have to discount.... I word our contract something to this effect...cut to a maximum of 24 times per season...spring and fall cleanups extra at a cost of ___$...doesn't say anything about minumum times...example today..commercial property didn't need to be cut so the crew just picked litter and trimmed....half the time spent but that's the way it is.
ps. I have 3 accounts that are on the 10 day cut...NEVER AGAIN!! We will fulfill the contract this year and then they are either on every 2 weeks ( which we have none right now) at a higher price or weekly.

[gusbuster]

Homer,
I can solve your problem! Change the wording from cut to service call, visit ect...

Here, South of San Francisco, We cut lawns all year around. I may not cut the lawn, but at least will do something so I can call it a service call. Some of my newer accounts always try to pull,"But the lawn doesn't need to be cut during the winter" I tell them "You may see me blow by your place during the winter months, but how about whey your lawn takes me an hour to do in the spring time? It takes me double or triple the amount of time that I spend on your yard during the winter. That's a point that I always make. If I can't resolve that issue right then and there, guess who's looking for another person to take care of their yard.
John

[Lee Homan]

My seasonal contract reads "Includes up to, but not to exceed 28 cuts from april through October". Anything over will be billed extra anything less the price still stays the same.

[HOMER]

Let me try and clarify this a little.

Missing the cut is not due to the fact that work didn't need to be done. It was missed because I failed to get there. I did not meet my o-b-l-i-g-a-t-i-o-n. I therefore cannot charge them for what I did not do.

In the slower months I go less anyway, and bill them the full amount, it's the last couple of heavy months that I have missed some of them at the end of the month when (I) should have been there. Rain has been a pleasant surprise this year but has also caused us to get way behind.

Please don't tell me that ya'll never get behind:rolleyes:

Please don't tell me that ya'll bill people for work that was never done!:angry:

[Calvin]

No offence Homer but we never get behind & we have alot of contracts, rain & heavy growth in the spring. May leave some lawns a little messy in the spring but we NEVER get behind. Don't be such a perfectionist, cut in the rain, you'll get it all done.

[bubble boy]

i bill monthly, actually hadn't heard of the 12 month billing method before recently. makes sense in theory but i was wondering

what happens if two months into the season a customer cancels? you have done two full summer months of work but received 2/3 of what you should have for those months. do you send them a bill to make it up?

second, since the vast majority of our expenses are in the summer i always like having the most money come in then. in fact i prefer prepayment for the year in april or may, so all my advertising, salary and equipment expenses in the spring can be covered.

most companies where i am bill per month, at least as far as i've heard.

[1MajorTom]

Quote: but we NEVER get behind


Never and always are words that are pretty hard to live up to.

[Southern Lawns]

Homer,
I don't even think spelling it out for em will help.
I understand what you are saying and it sounds like you've got it figured out!
Raymond

[LoneStarLawn]

Originally posted by bubble boy
i bill monthly, actually hadn't heard of the 12 month billing method before recently. makes sense in theory but i was wondering

what happens if two months into the season a customer cancels? you have done two full summer months of work but received 2/3 of what you should have for those months. do you send them a bill to make it up?

second, since the vast majority of our expenses are in the summer i always like having the most money come in then. in fact i prefer prepayment for the year in april or may, so all my advertising, salary and equipment expenses in the spring can be covered.

most companies where i am bill per month, at least as far as i've heard.

1. It is a contract. If there is no cancellation clause then they are binded to that contract. If they cancel then they pay the rest of the amount of the contract. Now, most contracts do have a cancellation clause and with that comes a cancellation fee or ,to be nice, a statement that states that the past services rendered will be recalculated and billed for the value "per cut" minus payment received.

2. He can always use the money saved up during the winter if he has less expenses during that time.

[HOMER]

1. Thanks Raymond!

2. Good customer relations help alleviate the cancellations mid summer. More of a chance of cancelling mid winter! They really need me in the summer..............If they cancel in May I'm still ahead, they lose I don't. August is a different story, just never happened. People love me.

3. Extra money does come in the summer, seasonals........commercial and residential.

4. Never get behind? Hmmmmmmmmm. Got much to do? Is there such a thing as being ahead? Not on my route. Not with bahai grass.

5. Thanks Raymond!:rolleyes:

[lawnman_scott]

Homer i would charge the same amount, because at some time you may do 31 cuts a year at some properties. Its hard for you changing, because they are used to the per cut paying, but with the new customers you get i would bill them and bid them all monthly. You cant beat it in my opinion. Last winter (Florida winter anyway) my trailer did not leave the garage for 1 week at a time, and this happened 10 times. My income went down about $200 a month due to a few pay per cuts that i have, and i made that up in the amount i saved on gas. Monthly billing is also so much easier, dont have to look and see when and how many times you cut, just do your billing and its done. May not be a good time to do it though, if they have been paying per cut for part of the year, but you know when is a good time to do the change im sure.

[HOMER]

Thanks Raymond!

[kris]

Sorry, did not know it was because you didn't make it there..of course your right to take it off the bill...

[TGCummings]

Hey Homer,

I see where you're coming from with this. It's difficult because you're switching over from a different method, but I've always billed monthly (year around). On weekly accounts, whether I make it there 3 times, 4 times, or 5 times in a month, the amount is the same. I've had rain delays, planned vacations, injury time-outs, etc., but I've never billed for less than the agreed amount. In the long run, those things just make themselves up.

For example, this year there have been less rain delays and the wife and I decided to save some extra $$$ by not going on vacation this year. That means my customers will be getting extra cuts over the course of the year (we mow year-around in Cali). My monthly charge remains the same. Next year, we could get El Nino like delays and end up getting weekly lawns cut 3 times/month 3 consecutive months, but the charge remains the same. Income becomes consistent, and it works out real nice.

I've had a few customers over the years give me grief about this, but by and large the good ones understand. The bad ones get weeded out anyway and find another (less talented) practitioner. ;)

Hope this helps!

-TGC

[Island Lawn]

I Agree with you, TGC

In my limited experience,
Seasons vary in length and in number of "service visits".
(I say "up to 45 service visits" but my max, so far, is 43)

Also, if you don't run your mower for a half hour, it dosent cost you as much. But the property stays perfect and the price stays the same

I am cutting some lawns every 5-6 days now just to keep up with the growth.

Hope this helps someone!

BTW, it sounds like you have it figured out.

[Lawn Dog2001]

Bill them $100 a month no matter what. Then at the end of the year if you have only cut it 28 times, deduct the 2 cuttings on the last billing month of the contract. Or you could credit those 2 cuttings on to next year. Just an idea.

I have considered offering a payment option like this for a couple of years now, but I always chicken out. In the summer customers need us, in the winter they dont. I am always afraid of slow or no pays after the grass season ends. Have you had any bad experiences with payment in the winter Homer?

[lawrence stone]

Dog,

Bill in 8 installments from April to November. Don't even think of giving anything back. If it is a wet year you will work your butt off.
If it is dry it will work in your favor.

You are offering a guaranteed service. If it is dry it is not your fault.

[skeeta]

i would give an approximate number of cuts (28-30) , rather than a exact amount. you cant control mother nature and stuff happens , even to the best of us.

[cutting edge]

Homer,

I use a similar billing plan with some of my customers. The only difference is the number of cuts. I told my customers that if they did not receive the amount of cuts agreed upon within the year that I would credit their account - next year. This helps to insure renewals.

I would not credit the customer for that missed cut just yet. There is a lot of season left and they may call and need the yard cut for a party, funeral , or something else, you never know. Wait till the end of the year if you have to credit, tell them it's your new Christmas Club program.:)

[bobbygedd]

last year for the first time i tried the 12 month billing plan. it has been nothing but a headache for me. we write up the contract, in detail, then sit with them and thoroughly explain that they will recieve all of this service, over about a 9 month period, and pay for it over a 12 month period. this means we r actually loaning them money, free of interest. i also explain that if weather causes us to miss a cut once in a while, the payments stay the same. STILL, we have people that insist on removing the price of a cut off of the bill if we miss, or even call and say not to come this week cus it hasnt grown, then send me a short payment. im done with the 12 month plan, nothing but aggrivation for me.

[GreenQuest Lawn]

Bill in 8 installments from April to November. Don't even think of giving anything back. If it is a wet year you will work your butt off.

You are offering a guaranteed service. If it is dry it is not your fault.

This is the way i do it. It all seems to average out in the end. I may bid a lawn at 1hr to maintain on a weekly basis.

In the Spring it may take 1hr 15min

But then in the summer It may take 45 min or less and may be skipped once or twice.


To answer Homers original question. If I did not make it to a particular account I guess I would credit them. But not if it was burnt up.