High Risk customers = Deposit $

[Jason Pallas]

This year we're instituting a new policy - for customers that have slow paying credit histories with us and for new customers that we evaluate as credit risks. Before we begin service, we're asking for a $200 deposit that will be credited to their LAST months (or 2 ) service.
This way, the customer is always "in the hole" for $200 to you until the end of the service year. We figure this will eliminate a lot of collection problems later on. Lots of other types of services require deposits, so this shouldn't be anything new to people.
It sure beats looking at a list of 41 customers that owe upwards of ..... well ....... a whole lot $$, that I still have yet to chase out of them!
Anyone else have any policies that address this type of thing?

[klc]

seems kind of new and maybe riskey----hope that doesnt give your company a bad rap--- ever thought about getting rid of bad accounts or visiting with them about the problem
Good luck let us know how things go

[Jason Pallas]

Visiting them with the problem - heck I'm practically chasing them. I'd be better suited to be a detective after the lengths I've had to go to in order to track and chase money down somtimes. It was OK when I was younger - but I just don't feel like having to work that hard for my money now.
WIth some of these people it's a game. I've got some accounts that I've probably called 70-80 times since Sept. and stopped by 25 times. It's ridiculous - they have no concept of how to mail in a check. If you don't get them on payday on the way into the house with their check, you're out of luck - and if they promise to pay you on Friday at 5pm, if you don't get it right then (mostly because they don't show or answer the door), they'll spend that money by 8pm!
I figure because we've been around for a long time (20 years) and we're not really soliciting their business (they're coming to us), it's not unreasonable for us to ask for a deposit on accounts in areas were we get stiffed a lot or from customers who fit profiles that stiff us a lot.

[geogunn]

jason--if I were a slow payer...the $200 would cull me out.

that is your point isn't it?

GEO

[Jason Pallas]

Yeah - that's my point exactly - it sort of pre-qualifies a customer AND gives you some insurance that you won't give stiffed. If they get more than $200 behind in their bill, you just stop. You're even. You drop 'em and move on - the only thing you've lost is having that slot filled by a customer that you don't have to replace.

[LAWNGODFATHER]

Per payed invoicing.

Have them pre pay for the month.

IE: 4 grass cuttings = how many $ paid by so in so date.

4 grass cuttings plus application plus shub trimming = how many $ paid by so in so date.

All your doing is off setting the dates.

You don't use the services that month then credit it to the next month.

[Heavenly Green]

Jason, You know Ive got the same problem and what steams
me is Ive already earned the money and then to spend hours trying to collect Ive gone as far as sitting in front of there house
waiting for somone to come home. And then when they did arrive
still got the run around "Oh my husband didnt pay you I thought
he sent the check Ill have to talk with him and call you tonight"
All she did was avoid me never hear from her. They owe me 250.00 and live in a nice house at least 300,000. And yet its like
a game to these people. I felt like the paper boy this last year
chasing money.

So it can be tricky trying to guess who gonna stiff ya. Im on
board with the set monthly price/ paying upfront for the mo.

Steve@S&S Heavenly Green Lawns:D

[65hoss]

Just eliminate them and be done with them. I have a policy, if I think the person is going to be hard to deal with, slow payer, or non payer, I don't do anything for them.
I figure, if I've got to do something to cover myself then I shouldn't even have them around.

[Guardian]

I have used the deposit system for over a year now. I haven't had one customer complain (some are just concerned about when they get it back) For me, it gave me the best piece of mind you could ask for.

I simply require 1 month's work deposit. For my residential contract customers -its between $119 and $300. If it is a non-contract cust, I still simply charge the equivelent to 1 months work. It is only refundable when we cease to do business. I thought about giving it back after 6 months or so, but I've seen long time customers just "change" (you think everything is the same, but somehow they've become unhappy and instead of talking with you about it, they just decide to stop paying until you get the hint)
SO, it's simple- If you want to be invoiced, you have to pay a deposit. If you don't like that plan, then leave a check under the mat. If you forget to leave it (somehow they do), we are unable to service yard.
How many times do you see the DUE date come and go, some money doesn't show & you end up sick in your stomach for days until its resolved? Do I call today? Its time to go back to service that customer-Do I go? Did they even get the invoice? Maybe they just decided not to pay and want to see how many service visits they can milk out of me.

Thank God these kinds of customers are few and far between for me, but with a deposit on file -I just don't have to worry.

I don't require a deposit on commercial work for large, established companies. (I have been burned by 2 hotels with Recognizable names -but thats it)

Like LGF said, pre pay would as well.

[bobbygedd]

this is the way i do it now: if u r a "full service acount"(spring and fall cleanup, weekly cuts, fert program) your first payment is due no later than march 1. each payment is then due no later than the last day of each following month. i have the right to cancel service if the payment is one day late. by being paid by march 1st, i am about a month ahead of everyone from the start. but, the payments are broken down this way "for their convenience" . now, for just mow and fert customers: the fert payment is due in full, in advance. so i got a check for 2-300 bucks in advance, if they choose to stiff me on the mowing, i stop fert. now, mowing only: payments are due by the 15th of each month, for that entire month. ex: the fee for the whole month of april(4 cuts) is due no later than april 15th. im done being screwed. everyone signs a contract, no sign, no action. if u r asking me to "trust you", then ill ask u to trust me, pay me for the whole season in advance.

[1grnlwn]

Im still after a client for $240 from 2001. She had the nerve to say a month ago that the property looked great and make sure that I leave a spot open for next year. A good ploy to quiet me for couple of weeks.

Renters,very slow payers, very slow growers = sombody elses customer

Like the pre pay idea. Im certain the users will go elswhere when presented with this option.

[Lawn Dog2001]

When I have a problem customer I do exactly what Lawngodfather recomended. I bill monthly pre pay. This way they are still always in the hole one month. If you tell people you want a deposit that may not go over well.

[lamblawnscaping]

Mowing customers must all sign a service agreement. Price of cut times number of cuts (april 1 - nov 1) plus one cut in nov and 1 in dec divided by 8 = monthly installment. First installment due before April 1st. Cutting starts april 1st. No payment no cut. I spent so much time chasing people down this offseason to get my money. Two people moved, thats 400 dollars I will never see. One person said they had a problem with this policy and I told them <b>"You don't ask the bank to do your landscaping, don't ask me to extend you a line of credit"</b> They can find someone else to service their property.

[Bob Minney]

I remind slow paying customers that I provide an on time, trouble free service and expect to be paid the same way.
When a slow pay customers wants to continue service I offer them 2 options.
1. Prepay the whole, or balance, of the season if paying by check.
-In 6 years of this policy only one has done this.
2. Pay by credit card-The card is run the day before service is provided. I keep about 1 in 4 this way. If the card is declined service is terminated.

With long time customers (3+ years) with a good pay history I tell them on the second late pay that I'll have to cut off credit the next late pay. With new customers the second time they are late I offer the above options.
Every no pay starts as a late pay.

[Ty Stahl]

I worked for an outfit out of Caledonia, MI a few years back. His policy was you signed a contract AND paid the whole season in advance. No ifs, no ands, no buts. I try to follow that same policy myself. The only exceptions I will make is for elder;y people who are limited to Social Security payments, or clients that have always paid their bills on time and are in a pinch. In those cases I will break the seasonal payment down to two or three payments. I've had good luck so far with this method.

Ty

[Jason Pallas]

I'm impressed - these all sound like good policies that everyone has. I look forward to implementing ours. Out of 450 customers - it's only 50 or so that make my life hell when it comes to this. I'm glad to see them either pay up front or hit the road. THanks for the input!

[Shady Brook]

Boy, there are some really good thoughts being exchanged here. I am preparing to draw up contracts in the next week, and implement a policy manual to prepare for the coming year(s). I am not sure which policy my market will bare best, and still suit me. In my area, I know of only one company that has a solid 1 year contract. I know of none that require a deposit of any kind, or for any prepayment beside the company above. I do not want to offend good payers, but also want to be careful not to be involved in any discrimination issues. It seems like a straight accross the board policy might be best, but then again, I am not sure about laws regarding discrimination.

I hope more thoughts are exhanged.
I think maybe some ideas on bad customer profiling would be neat.

Thanks
Jay

[PrimeGreen Lawn]

We all have slow paying customers. This year, I am including a SAE to hopefully speed up some of these slow-payers. However slow these people are, they ALWAYS pay eventually.


Scott

[Matt Dudley]

you little boys need to learn how to manage a lawn care service not a scrub service

[plow kid]

Originally posted by Matt Dudley
you little boys need to learn how to manage a lawn care service not a scrub service

Pull your head out of your sphincter and see the light of day buddy, most people that have replied to this thread I know have a legit or close enough to buisness.

And yes, this year I will be implementing a 1 month prepay plan pay before I mow.





Matt Dudley do right,

http://www.members.aol.com/ncls484/scrub.jpg

.
.
.
.
.
.
.
.
.
.
Dont it feel good when somebody calls you a scrub? Vice Versa. Welcome to LS.com

[65hoss]

Originally posted by Matt Dudley
you little boys need to learn how to manage a lawn care service not a scrub service

This is a thread on ideas. That is a bold statement you posted. Only problem is, you didn't add any great knowledge to the topic.

[LAWNGODFATHER]

Originally posted by Matt Dudley
you little boys need to learn how to manage a lawn care service not a scrub service


This is a pretty good post from an experiance 50 some odd year old child.

Is Eric Etsrada right about you?

[LAWNS AND MOWER]

I think I might use this deposit idea for the 3 slumlords I do work for. Besides, tenants prepay their rent so why can't the slumlords prepay for their lawncare. Getting $$$ out of slumlords is like pulling teeth. They are the worst. They see money as all "income" and no "outgo". Some of my customers insist on prepaying at the beginning of each month. Ya'll might want to contact Jim Lewis if you have alot of slow payers. He can turn you on to the "Auto Pay" system.

LAWNS AND MOWER

PS Think maybe Stone has taken on a new identity as Matt Dudley?????????

[1grnlwn]

Dudd Matley Who?

[Jason Pallas]

I've tried the SASE thing - it seemed to mostly be a waste of envelopes and stamps - we didn't get much response at all. Unfortutnately, the best collection device I've found is repeated phone calls and personal visits. This eats up a lot of time (personal visits - but is pretty effective).


Matt Dudley - I've probably got more in uncollectable debts than you'll make all year. But, if 450 weekly accounts and 20 years in business makes me a scrub in your book, I'll gladly accept the title.