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Craig Turf Management
10-24-2001, 11:10 PM
I have been considering including a stamped, return envelope in my invoices each month. My theory is that if my clients don't have to go and buy a stamp, maybe they will send their payment in sooner. All of my folks pay each month, but it would be nice to have more money coming in at the front of the month, rather than the end.
Thanks, Bill Craig

dhicks
10-24-2001, 11:13 PM
I guess your proposal sounds good in theory but I prefer to say net due in 7 days on my invoices. I have only 2 customers that cannot comply with my requests. They always pay, but are slow payers.

kutnkru
10-24-2001, 11:20 PM
Bill

I do as you have suggested and like dhicks has stated its not necessarily the envelope that gets to them but its the TERMS that in fact puts the fire under 'em. Of course I have heard many times while cutting how the envelopes do help because they always seem to forget to get stamps. LOL!!!

Its a good write off too. Especially if you are able to use someone elses Pitney-Bows stamper -LOL!!!

Kris

grass chaser
10-24-2001, 11:27 PM
I have started enclosing the self addressed envelope in with my bills without postage and its is very effective. My customers seem to mail thier payments quicker since I have done this. I purchased a rubber stamp and a large box of envelopes from office depot instead of purchasing pre printed envelopes just for bills. I do however have pre printed envelopes I use to send proposals out to new clients and such. Just to let you know the rubber stamp only cost around $4.00. It sure saves your hands for more important things.

JimLewis
10-24-2001, 11:40 PM
I think puting a postage paid envelope would probably help, yes. Or at least a self addressed envelope. Think of how you get most of your monthly service bills. They include a self addressed envelope but no stamp. This saves you time. Still, I don't think it's gonna make an overwhelming difference to do either of these. But it will probably help a few people pay sooner.

What you (and every other LCO here) should really consider is setting your clients up on Automatic Payment (http://www.lewislandscape.com/automatic_payments.shtml). We began such a program about 2 years ago and it has worked wonders for our monthly receivables. Now, I have 78 clients (over half) set up on this program. And I get money deposited in my bank, on time, every single month from each of these people.

Simultaneously I adopted a zero tolerance policy on late payers. I contacted those who were chronic late payers and told them [very politely] they'd either have to sign up for AutoPay or we'd terminate service.

I also began offering two prices for every bid I gave. The first price ($115 / month, for instance) is the rate for they get if they sign up for AutoPay. The second price (always at least $15 more, $130 in this example) is the rate they pay if they prefer to be invoiced. Now, 95% of new clients choose AutoPay.

Automatic Payments are very common thing these days. Most health clubs make it mandatory. Banks offer a discount on your mortgage rate if you sign up for AutoPay, etc.... People (especially rich people) are used to it. Everyone seems to be fine with it (to my surprise because personally, I HATE things coming out of my checking account automatically.)

If you want more specifics on how this kind of program works and how much it costs just email me. I'll tell ya, I never worry about receivables anymore. It's wonderful!

Craig Turf Management
10-24-2001, 11:41 PM
Thanks for the quick responses. My terms are net 15 days for all of my contract clients, and due upon receipt for everyone else. But some folks just don't get the money in in 15 days for whatever reason, and I'm not going to drop my regular or hassle them if my payment is a little late. It would be nice to get the money into my office (corner of my den), alittle sooner, and by including a preaddressed and pre-stamped envelope it would be a convenience to my clients as well as a subliminal message to pay their bill.
As far as addressing envelopes go, I use Quickbooks Pro. I buy the little two window envelopes, and the computer spits out the invoices tha once folded have the address of the client in the large window, and my return address in the other.
Once again, thanks. Bill Craig

LoneStarLawn
10-25-2001, 12:40 AM
We send out invoices that have our address on the remittance slip so they can just slip it in the stamped return window envelope with no problem.

We have been using stamped return envelopes since the beginning and I can tell you a few of things that I have learned.

1. The people who always pay on time will pay sooner and will see the stamped envelope as a "perk". It helps when they give out referrals.

2. One time late payers will not be late again.

3. Usually late payers and always-late payers will become "LATE PAYERS". They see that enveloped stamped as "Oh I have a stamp already so I can just send it out tomorrow". They are procrastinators and will always be.

JimLewis
10-25-2001, 06:09 AM
I agree with LoneStar about late payers. There's no way to change them. If you feel like puting up with them and can afford to, fine. Most LCOs just put up with them.

Personally, I don't like loaning money to my customers (which is really what it is if they are holding on to your money past the time it is due). Furthermore, as you get a bigger business, these late-payers add up. When I finally reached my wits end I was averaging $4000 + in late payments each month. Do you know how much that sucks?!? Some clients would be up to 3 months late. Sure, they'd always appologize but I was the one who had to pay all of my employees and bills in the mean time. What began as a small problem had turned into a large problem once we began to get bigger. Hence, I took action as described above. And it's been great. We get about 90% of our payments by the due date now. And 99% by 5 days after. It's pretty nice.

Craig Turf Management
10-25-2001, 09:14 AM
Thanks to you for all of your help.When I invoice next week, I'm going to include the pre-stamped return envelope. Hope it helps things a bit.
Have a great day:blob4:

KerryB
10-25-2001, 10:27 AM
Hope the envelopes help and dont just become an added expense for nothing.
I agree that most leopards will not change their spots. They just find another reason to put it off. The best thing I think (mtc) is a due by date and a late fee if not paid on time. Most people do like to save money. Maybe the ppe and the deadline with late fee will help to remind them to pay.
I guess I am lucky that all my accounts pay on time, but most of mine are commercial props. My res cust. pay when service is rendered, and that was their idea not mine but i am not kicking that horse in the mouth.

Craig Turf Management
10-25-2001, 11:44 AM
Good point lawndoctor. The late fee is an idea worth looking into. I don't have a real problem now, just don't want it to turn into one. I'll give it a couple of billing cycles and let you know if I have positive results.
Bill!

JimLewis
10-25-2001, 02:32 PM
Late Fees aren't very effective. After I put late fees into effect we stiill had almost no change in late payers. Here's why...

First of all, there are laws governing the amount you can charge for late fees. And even disregarding the laws, if you make the amount too high (e.g. over $10) people (even the early payers) will think you are being exorbitant and begin to think poorly of you. And if you keep the fee low (e.g. $10) it's not really much of a penalty. Many people see that and think, "Oh, cool! I can just pay it a month late and it's just $10 more."

Secondly, you'll find most people ignore the late fee. They simply pay the regular amount with no fee. Then your faced with either ignoring the fact that they didn't pay it or harrassing them for $10. Either option sucks.

Finally, when you assess late fees it's customary and probably even legally mandatory that you give a grace period before the late fee is assessed. You can't just say "If you're 1 day late you gotta pay more." And even if you do, again, people will begin viewing you in a negative way. So let's say you give a 10 day grace period before the fee is assesed (which is what we do for customers who we invoice.) Well, for late payers that just tells them that if they get the check in the mail by that 10th day, they're fine. So payments are still late, albeit maybe not quite as late as they might have been.

Take my word for it. I've been dealt with all of this more times that I care to recall.

Island Lawn
10-25-2001, 02:43 PM
I send my late payers invoices out a week or so earlier than the rest.

I figure if they want to hold onto it, let them do it on the front end.

I find this has helped, but NONE of mine are chronic late payers.

Craig Turf Management
10-25-2001, 02:52 PM
Thanks for the input jimlewis. Didn't think about it that way. I knew that I could count on you guys. I will do the stamped envelopes, but I won't open the late payment fee can of worms.
Take care, Bill!

jcoat
10-25-2001, 03:11 PM
Craig Turf Management, you might include a note stating "the whys" concerning the stamp... ex. to expedite the process; to add value etc... maybe even a note reiterating your late pay policies and next season weeding out the customers who continue their tardiness.

KerryB
10-25-2001, 03:32 PM
Jim I understand where you are coming from, but I disagree. Your saying that prople look badly on banks, credit card companys, doctors, plant nurseries and every other institution that implements late fees.
I dont think people will look badly toward you for trying to get your money for services rendered. You say that they may think they can pay it a month late and only pay $10.00 more. Well if you dont impose a pay by date and a penalty for paying afterward then they say, "oh cool I can pay this a month late with no penalty".
Lets face it you are giving your customer a loan. If they pay on time you are not charginh them any interest, show me a bank that does that. I just think anything that is well worded as to not pi$$ them off but gets them to pay on time is ok.

JimLewis
10-25-2001, 05:41 PM
Your saying that prople look badly on banks, credit card companys, doctors, plant nurseries and every other institution that implements late fees.

No, I didn't say that. I said that if you get overzelous with late fees (e.g. making the late fee a rediculously high amount or not having a grace period) then people will look negatively on you. All of the banks, credit cards, doctors, etc. I deal with all have very minor late fees (e.g. $10 or 1%) and they all give a good 10 or 15 day grace period before imposing them. I am just saying that we have to be reasonable in imposing late fees. But when we are reasonable it's often no enough of an incentive for late payers to pay on time.

Still, I am not dead set against late fees. I think you ought to have them. I still have a $10 late fee for accounts past due more than 10 days. But it still doesn't keep late payers from paying late. Hence, I had to come up with another solution to keep late payers under control.

All I am saying is that if you are counting on a late fee to solve all of your accounts receivable problems you are in for a big surprise. It doesn't solve the problem. And I am not sure our late fee policy has really ever helped at all, even though I continue it. What really put an end to our accounts receivable woes was AutoPay.

LoneStarLawn
10-25-2001, 08:36 PM
Originally posted by Island Lawn
I send my late payers invoices out a week or so earlier than the rest.

I figure if they want to hold onto it, let them do it on the front end.

I find this has helped, but NONE of mine are chronic late payers.

We bill at the beginning of the month. When do you bill?

If I were to bill a week earlier I would be billing for the last week of that month of work that has not been done yet. What would the customers think then? That would just give them a reason to wait and then pay.

KerryB
10-25-2001, 08:43 PM
Oh ok Jim I got ya. lol

bubble boy
10-25-2001, 08:47 PM
stamped envelopes? i see this as giving the stamp away.

you'll still get oh since youre here ill give you the check or the check will be in the mailbox this week.

then goodbye stamp. could cost a lot of money over a season.

late fees or suspension of service are better alternatives.

HBFOXJr
10-25-2001, 11:09 PM
Self addressed returns are my choice and have been for years. We don't stamp. Tell me who does if you owe them money.

If you don't want have envelopes printed you can print labels and stick them on plain envelopes.

Bar coding helps and most label programs will allow this. Also use the zip + 4.

Island Lawn
10-26-2001, 01:27 AM
Alan,

you got it! I send out my bills before all the work is done for the month. Anything extra done at the end of the month that wasn't included in the bill, gets tacked onto next month's.

I explain this to everyone and is in my agreement. No balks from customers yet.

As always, I'm open to suggestions for improvement...

HOMER
10-26-2001, 08:58 AM
I believe the cost of a stamp is about to go through the roof in a few months due to the postal service having a good "reason" to raise them. I might try the self addressed envelope without the stamp and see what results I get. Most of mine pay before the 10th of the month, some have told me they get paid around the 15th and that they will send it then, they do and I'm OK with that. Others drag it out til around the 20th.

Hey, at least I got money coming in all month huh!

LoneStarLawn
12-18-2001, 05:20 PM
Originally posted by Island Lawn
Alan,

you got it! I send out my bills before all the work is done for the month. Anything extra done at the end of the month that wasn't included in the bill, gets tacked onto next month's.

I explain this to everyone and is in my agreement. No balks from customers yet.

As always, I'm open to suggestions for improvement...


I am confused on what you are saying. How is that any different? The only thing different I see is that you have a different 4 or 5 weeks that you bill for. Since you are tacking on services that were obviously not rendered when you invoiced onto next invoice that becomes the same practice that we do (a month or 30 days on each invoice) you just happen to bill for 3 weeks of one month (sometimes 4) and 1 week of another of each bill (4 or 5 weeks) and we bill for each month (4 or 5 weeks)....

Did I get that right?

I know this response is late, but I just read the response to my post....:D (Plus I am looking into the AuotPay since this past month AR has had problems...yeah I know winter)