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grassmasterswilson
12-06-2010, 08:04 AM
what is your discount on yearly payments? i currently bill per app or have it included in a customers monthly mowing invoice. i'm doing a 6 step program. think some of my customers would like this....even if i have to skip the summer app because of heat and drought. figured i would just credit them for the missed app or try to work something extra in.

cgaengineer
12-06-2010, 09:15 AM
what is your discount on yearly payments? i currently bill per app or have it included in a customers monthly mowing invoice. i'm doing a 6 step program. think some of my customers would like this....even if i have to skip the summer app because of heat and drought. figured i would just credit them for the missed app or try to work something extra in.

Some people discount prepays 10%.

ted putnam
12-06-2010, 11:55 AM
I offer 5%. It's more than they make keeping it in the bank. I really try not to encourage it although each customer gets a letter and it is nice to have some instant cash to get things off the ground in the Spring. However, truth be known. I'd rather have the money "trickle" in for cash flow purposes.JMO

rcreech
12-06-2010, 12:12 PM
I offer 5%. It's more than they make keeping it in the bank. I really try not to encourage it although each customer gets a letter and it is nice to have some instant cash to get things off the ground in the Spring. However, truth be known. I'd rather have the money "trickle" in for cash flow purposes.JMO

My thoughts exactly!

I don't like giving away "my money" for early pay.
I would rather the customer pay as we go...but it also locks in their business and is a great way to start of the spring with some cash flow!

Come end of March and early April...I am ready so see some green...and I ain't talk'n about grass!
:)

jbturf
12-06-2010, 02:09 PM
i offer 5% discount for prepayment

i get your guys prefering billing and steady cash flow

but i prefer prepays because
1.i dont have to worry about being paid
2.i dont spend extra time on office work-invoicing ,mailing etc..
3.and i save money on stationary and postage
and collection calls
4.cash flow early in season to put towards materials/equipment

turf hokie
12-06-2010, 06:31 PM
i offer 5% discount for prepayment

i get your guys prefering billing and steady cash flow

but i prefer prepays because
1.i dont have to worry about being paid
2.i dont spend extra time on office work-invoicing ,mailing etc..
3.and i save money on stationary and postage
and collection calls
4.cash flow early in season to put towards materials/equipment

And the winner is......

James Cormier
12-06-2010, 07:44 PM
Over the past years Ive offered 5, 8 and 10 %

Last 5 years have been 8%, I know its a weird number :)

However I will say I usually collect about 85% of my income this way. Prepaying has been very popular in my area. When I had a major price re structing about 12 years ago I raised my rates on certain items to bury the prepay discount.

JB pointed out the benefits to this and I agree totalaly. But here is one most important thing about collecting that much money in a short time ( most of mine comes in Feburary) you have to be good with budgeting your money. This can be a challenge when you look at your bank statement in the spring I also try and pre pay for some of my material and try my best to get the same discount I offer to my customers.

Another benefit is so many people pay in Jan & Feb so when they are getting bombarded with mailings and calls in the spring they are less likely to switch to a different company because of them being prepaid. Ive only had 2 customers ask to cancel and wanted their money back since Ive been doing this.

FdLLawnMan
12-06-2010, 09:30 PM
James sounds a lot like me. I offer a 7% discount for prepay and receive between 85 to 90% in prepays. I usually send the letters out in early February and give 45 days to pay with a reminder postcard around 35 days later if they haven't paid. Since I have a computer and printer in the truck I think I will leave the invoices on the doorknob this year to save the paperwork at night which I hate doing. James is correct. You have to be good with budgeting with so many prepays at once.

ted putnam
12-07-2010, 01:00 AM
And the winner is......

And he's a winner why? Because you and he do it the same way?:laugh: JK

Let's do some math.

You guys and I will gross the same amount for the year...say 200K
!00% of your customers prepay you for the year and let's say you offer a 7% prepay discount. That's 14K you give up straight off the top to be "hassle free".

I on the other hand collect about 12% of my money through prepays...24K. Of that 24K I offer a 5% discount or $1200 in discounts. I spend about $500 per year in printer ink, envelopes and stamps. (I do not stamp the envelopes for the customer) I leave an invoice and envelope(if not prepaid) at each customers door. I would leave something at their door anyway, it might as well be a copy of the invoice.

You give up $14,000 to skip what for me is a minor headache at worst.

I give up $1,700, have a minor nuisance and don't have to be as hard nosed about the budgeting through the year.

It's just 2 different ways of doing it.
It's just that I'm like Rodney, I'd prefer to keep that $12,300 in MY pocket.

*** It should be noted that I don't keep dead beats on my customer list for long. That's how I keep my collections hassle to a minimum.

turf hokie
12-07-2010, 07:05 AM
[QUOTE=ted putnam;3814580]And he's a winner why? Because you and he do it the same way?:laugh: JK QUOTE]

Well, yeah, why else would I declare him the winner?:laugh:

I only collect about 20% of my customers as prepay. so following the math of a 200k/yr gross I collect 40k up front only giving up 2k of that in prepay.

I usually need, and most of us do, that cash flow so that I can cover payroll, misc start up expenses, etc in march and april.

It makes sense for me and others but maybe not all.....

And your math and my math are similar so I think you agree as well, NICE...:cool2:

ted putnam
12-07-2010, 08:40 AM
[QUOTE=ted putnam;3814580]And he's a winner why? Because you and he do it the same way?:laugh: JK QUOTE]

Well, yeah, why else would I declare him the winner?:laugh:

I only collect about 20% of my customers as prepay. so following the math of a 200k/yr gross I collect 40k up front only giving up 2k of that in prepay.

I usually need, and most of us do, that cash flow so that I can cover payroll, misc start up expenses, etc in march and april.

It makes sense for me and others but maybe not all.....

And your math and my math are similar so I think you agree as well, NICE...:cool2:

:laugh::laugh: Ah yes... we do agree...so I guess I am a winner too...That is NICE!:laugh::laugh:

I misread. There are some that frequent this site that require prepayment from all customers. That to me seems like a hassle in itself. I see now that you are not one of those folks.

rcreech
12-07-2010, 10:17 AM
And he's a winner why? Because you and he do it the same way?:laugh: JK

Let's do some math.

You guys and I will gross the same amount for the year...say 200K
!00% of your customers prepay you for the year and let's say you offer a 7% prepay discount. That's 14K you give up straight off the top to be "hassle free".

I on the other hand collect about 12% of my money through prepays...24K. Of that 24K I offer a 5% discount or $1200 in discounts. I spend about $500 per year in printer ink, envelopes and stamps. (I do not stamp the envelopes for the customer) I leave an invoice and envelope(if not prepaid) at each customers door. I would leave something at their door anyway, it might as well be a copy of the invoice.

You give up $14,000 to skip what for me is a minor headache at worst.

I give up $1,700, have a minor nuisance and don't have to be as hard nosed about the budgeting through the year.

It's just 2 different ways of doing it.
It's just that I'm like Rodney, I'd prefer to keep that $12,300 in MY pocket.

*** It should be noted that I don't keep dead beats on my customer list for long. That's how I keep my collections hassle to a minimum.
Posted via Mobile Device

mikesturf
12-07-2010, 10:26 AM
I send my renewal letters out in February. 1/2 is due before I start and I drop off the second half invoice when I do my final app. No pre-pay discounts, no hassels of canceling an app during summer and FAR less paperwork than collecting 6 times per year. During the fert season I just want to focus on fertilizing and no money collecting.