View Full Version : Late Paying Clients!!
01-06-2000, 05:22 PM
What do you do with people not paying or paying late?? I have 2 clients that haven't payed for cuttings done last summer. Should I add late fees on it or just keep billing them?? I don't think I will be mowing them this summer or money upfront.<br>Any suggestions on this?? <br>Thank you,<br>Jason
01-06-2000, 05:43 PM
Call them. Ask them what they're planning on doing. I don't service late paying customers again - there is too many good paying customers out there.<p>Add service charges? You can, but they're generally not going to pay those. And you just want your fees to get paid, anyway.<p>Your phone call? Polite, friendly, cordial, make it out to be no big deal --but call and be persistant - the wheel that squeakes most gets oiled. <p>If you still want the customer, just make it nice squeak.
01-06-2000, 05:44 PM
Send them another bill and add on late charges, and don't cut them next year, not even if they beg you to. If you don't get your money mark it up to experience.DON'T let anyone get that far behind in billing. One other discussion a while back said do a poor job on their lawn and when they call and complain tell them their just getting their money's worth. Well it went something like that. I cut them off if they get a month behind,(unless they tell me their on vacation)see I colect each time I cut.<br>It's just my 2 cents worth to coin a phrase.Good luck and I hope that this doesn't happen to you again.<br>Ken <br>
01-07-2000, 02:57 AM
I instituted a new policy in the fall, all accounts 30 days past due are assessed a $5 per service "rebilling fee" and accounts 45 days or more subject to suspension of services. The four who balked are habitual late-payers anyhow, and three of them agreed to pay in advance this coming year. Havent heard from the fourth but wont matter much not a high volume/gravy job.<p>All services are due when done, about half are sent "courtesy billing" at the end of the month since its not always practical to be paid when you mow. If I dont see a check by the 15th I call them, you should too. Dont be shy, if your late with a car payment, or the check is lost in the mail the bank will call you they dont want it to get too far behind. <p>Bill
01-07-2000, 06:20 AM
It is important to establish and maintain a credit and collections policy for customers of all types - residential, commercial, friends, relatives, etc. We state (and they sign upon acceptance) that invoices are due upon receipt, billing period is 30 days, 1 1/2% interest charged on balances over 30 days from date of invoice, etc. This is sometimes difficult to do, but it pays off in the long run. The policy should be presented to customers when they sign a contract for services or when they purchase something, like at the bottom of a point of sale receipt. And, you should invoice regularly - that is if you bill every thirty days, then stay on schedule.<p>I explained in an earlier post that courts don't accept or collect on arbitrary finance charges or fees. So even though you don't expect to or may not want to collect the finance charge, you may not legally be entitled to it, and that could cause problems down the road with a customer who decides not to pay or to break it off on you. <p><p>----------<br>Phil Grande - Soundview Landscape Supply - http://members.aol.com/slsnursery<br>Ivy League Landscaping - http://members.aol.com/scagrider
01-07-2000, 02:28 PM
Thanks for the advice. It all sounds good.<br>I'm going to keep sending invoices out. I think I'm going to put late fees on them. <br>Thanks Again,<br>Jason
01-07-2000, 05:26 PM
Jason, I would cut this guy's next door neighbour for free and not cut his, when he asks why tell him you have a better chance of getting paid by the neighbour than by him.
01-07-2000, 05:48 PM
This is a challenge for a lot of us. I still deal with it every month. And if you don't get it under control early, it just turns into bigger problems when your company gets bigger. <p>Most of the solutions presented here are good. But they don't do much for actually getting your money to you on time for sure. <p>For that reason, I am implimenting a new policy this spring that I really think will solve the problem. From now on when I give a bid I give 2 prices. One if they sign up for our automatic checking account debiting program and another price ($10 - $15 higher per month) if they just prefer to be invoiced through the mail. <p>I found a cool company in my area that will set people up on automatic check debiting. If you can't find one in your area (I found this one in the yellow pages under billing) then feel free to email me and I will give you the number to the one I work with. I am sure the service would work regardless of where you are located. <p>The second thing I do now is I cut off all habitual late payers. I will give them an option to sign up for the automatic check debiting system if they want to continue being serviced by us. But if they don't I drop them (Very politely). <p>Tip - don't drop them until you get your $$. Bug them until they pay THEN drop them. Otherwise they may never pay. Keep them thinking your still going to service them until you get your money. <p>These two practices combined I think will work well. It sucks because you hate to loose a customer or shrink the amount of your total accounts. There's a ego blow we fill when we go from say 80 customers to 65. But you have to ask yourself this question; would you rather work for 65 customers and know that you're always going to be paid on time (have a regular, dependable income every month) or would you rather work for 80, and have to harrass 15 of them every month for payment, get your hopes up and then be let down when the money you are expecting doesn't come in, etc.... ? For my time, I'd rather work for those who pay on time, period. <p>I like one guys thougts I read somewhere lately. He said he leaves the late payers to the "bottom feeders" in the business. Which do you want to be? A bottom feeder? Or a professional business? <p>----------<br>Jim Lewis - Lewis Landscape Services<br>http://www.lewislandscape.com
01-08-2000, 11:35 PM
I agree with jimlewis in that you should leave the bad payers and crap jobs to the<br>"bottom feeders" in the industry. 90% of<br>my work is done on a 7 day invoice and most of my clients are pretty good.However after 45 days I send a gentle reminder letter.At 60<br>days I send a nasty letter threatening to<br>refer the matter onto our debt collection <br>agency.A few days later I call the debt collectors in.Its nice to be able to say you<br>have 280-300 clients but if 20-30 are bad payers then it becomes a pain in the butt.
01-10-2000, 07:11 AM
interesting concept...bottom feeder.<p>would that be the person that starts in the buisness with no lawns to cut and makes a buisness happen by the sweat of his brow and by never turning down a job no matter what kind of crap job it is because his family is squawking that they are hungry?<p>GEO
01-10-2000, 07:34 AM
geogunn,<br>Point well made!
01-10-2000, 08:02 AM
The remark about bottom feeders was (Leave the late payers and problem accounts to cripple the bottom feeders) which rings of truth. What he (Larryflint) was saying was go after better accounts that don't cause you problems and waste your time. The time spent trying to collect accounts past due, can be better spent making money. His advice sounds like words of wisdom, althought kind of terse.
01-10-2000, 09:28 AM
actually, i believe the bottom feeder reference refers to the guys who cut your throat on a job because they run junk equipment and have no insurance<p>----------<br>Stephen<br>
01-10-2000, 04:32 PM
Bottom Feeders:Thats where we all started from and hope to proceed forward.
01-10-2000, 08:33 PM
Bottom Feeders Thats where we (I presume) all start. Do all you men forget. I hope not, Because we all have to crawl,then walk, Then if we are lucky and have done everything right we can then run like a company should.<br>Just my 2 cents worth.<br>Ken <br>Lightcap's Landscape Service
01-11-2000, 06:09 AM
Thats why the new people are lucky to have this forum. The rest of us along time ago didn't have nearly as much help. As long as there is this cycle of lowballing. The rest of us will never reach our potential. To the new people out there if you sell your service well to the customer. You can get the going rate for your area. If the customer call around and if all the estimates are close together. Then the best salesman will get the job. If most of the lawn services in one area stick to a 30 per hour + then you can establish a good profitable going rate. Or 35 to 45+ job rate. I wouldn't even tell the owner that you are new. Salesmanship and appearance and being friendly mean alot in getting the rate you need to make it.<br>Charles
01-11-2000, 02:17 PM
whether intended or not I think the reference to "bottom feeders" is not a complementary reference. bottom feeders by nature of their position on the food chain are the ones that eat the excrement of those that exist higher on the food chain, are opportunistic when they find something to eat, and thankful for it. I suppose that does describe at least some of us at one time or another in this buisness.<p>GEO
01-14-2000, 03:57 AM
BOTTOM FEEDER- A person or persons who run<br>old rubbish equipment,who have no insurance<br>and who operate at a fraction of the hourly<br>rate that everyone else works at.Generally<br>considered a minor nuisance and tend to <br>disappear without warning.<br>Hope this definition clears things up :)
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