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rcreech
12-21-2010, 10:15 PM
I will be the first to admit that I love selling and love working...but I HATE paperwork!

I have done a poor job in the past on staying on people that owe me...but I have always gotten paid.

How do you guys handle your past due accts?

I get busy during the season and don't do a great job of tracking who is paying.

I have about 12 customers that are past due for over 120 days and about 30 that are between 60 and 90 days. It isn't for a large amount but it is plenty!

I have never had any issues with people paying at all.

I started calling them yesterday and got a pretty good response but we will see.

Do you all send out Statements and if so...how ofter?
How do you handle later payers?

Now that I am getting bigger I want to keep this in check next season.

Any help on what you do to take care of late payers would be greatly appreciated.

Thanks,
RC

CHARLES CUE
12-21-2010, 10:28 PM
I always send out another invoice first. That says this statement is past due.

If i don't get a response i call them.

Calling them i seems to get the best response.

I have 2 that have not paid yet.

One of them i don't think i will ever get my money i have talked to her different times.

I keep track if they have not paid for the last treatment i don't do the next one.

Charles Cue

RigglePLC
12-21-2010, 10:37 PM
In 2009 I left an invoice on door, always. Also sent bill at end of month. (Unless it had been less than ten days since last treatment.) No additional service, if owed for 30 days or more. Called past due accounts when 30 days or more. Called a few each night.

MacLawnCo
12-21-2010, 10:56 PM
change your parameters in SA to put them on credit hold after 60 days or whatever you choose. Thats one of the top 10 things I like about the software

Barefoot James
12-21-2010, 11:15 PM
What software your running creech?

grassman177
12-21-2010, 11:43 PM
yup, software can catch that AND some you can set individual limitations on. we too have a few though, but dont go too far before stop service letters go out

ted putnam
12-22-2010, 01:17 AM
I'm the same way Creech and I'll admit I have about $5800 out there right now. $1800 is over 30 days. I sent letters last week but this is the first I have sent this year. I doubt I get it all by the 31st but will get most by mid Jan. My software does a great job of tracking and even continually gives me warnings of their status but it doesn't dial phones or lick envelopes and stop by the the post office. I have to do that and I haven't done a very good job of it this year. Add the fact that the economy is bad and it makes for even more late payers than normal. I don't send letters or call until 30days or longer past due. On the other hand, I don't do lawn care for free. If people owe me for one app and it's time for the next, I'll do the second, leave a double balance invoice(depending on customer history) and go on. They will not get the next until I receive payment...period. Most are good about getting caught up but there are deadbeats. Deadbeats get called and letters and if they don't pay they get dropped from the customer list plain and simple. I've got about 4 who will be getting a prepay letter this spring from me but if they don't "catch up", that's all they'll be getting from me in 2011. Few deadbeats have the "balls" to call me asking why I haven't come by to do their lawn after avoiding me for that long. And, if they've avoided me for that long, I figure they're better off being someone elses pain in the azz. I charge enough over my costs that it's not worth it for me to pursue it legally. That would just be more pain in the azz from that particular customer. At a certain point, I "cut" my losses and move on.

grass4gas
12-22-2010, 06:56 AM
Showing up with a very large individual dressed in black named Guido would do the job.:laugh:

We all go through this at some point. I'm like Ted in the fact that I have some "Chronic" late payer's, but they pay. I will do their next service if they have not paid for their previous app when it's time for that service.

I don't have a long term problem with the late payers...some you work with, the rest you drop. At this time I only have 4 past 30 days and total less than $300.00. I will send out a second statement, and after 15 days from the last statement, I will call.

All of my customers know me, because I am solo. That makes it easier for people to pay because they feel that I am in touch with them and not sitting behind a large corporate desk IMO.

I enjoy what I am doing to much to not do it this way.

As mentioned, in this economy it has to be somewhat expected. Just depends on threshold of tolerance.

rcreech
12-22-2010, 08:37 AM
Thanks guys!

Sounds like we are in the same boat Ted! We usually are in talking :).

I do run Real Green and I have it does put people on credit hold but we don't pay attention to it.

Reason being we want to run our route and not have to go back. Most of these people are great payers and I don't want to SKIP them during our day.

Next year I think we will be able to keep a better eye on things as I have a new guy coming on...but I suck at this bad!~

I guess I will finish out the season with calling and next year implement your stategies.

So...
Invoice
Then re-invoice (say at 30 days)
Then send a statement (say in 15 days)
Follow up with phone call


Does that sound right to most of you?

thomsoutdoor
12-22-2010, 08:42 AM
Paper work has always been my draw back. Glad I am not alone in this.

fl-landscapes
12-22-2010, 10:27 AM
Thanks guys!

Sounds like we are in the same boat Ted! We usually are in talking :).

I do run Real Green and I have it does put people on credit hold but we don't pay attention to it.

Reason being we want to run our route and not have to go back. Most of these people are great payers and I don't want to SKIP them during our day.

Next year I think we will be able to keep a better eye on things as I have a new guy coming on...but I suck at this bad!~

I guess I will finish out the season with calling and next year implement your stategies.

So...
Invoice
Then re-invoice (say at 30 days)
Then send a statement (say in 15 days)
Follow up with phone call


Does that sound right to most of you?

thats the problem. You want to skip them, then you think, "Ill skip them and the check will be there when I get back and have to go back to do it" so we just continue to do service........I hate when people dont pay, drives me nuts.

Ric
12-22-2010, 10:45 AM
RC

I am lucky with having Upscale people who actually chase me down the street to pay. But I am in a very good market area. Of course I have trained my customers over the years by handing them the invoice before I start the treatment.

Suggestion might be to Offer a On time payment Discount instead of a Late payment charge. By Raising Prices in such a way that your good paying customer are paying the same, you only DING your dead beat customers with extra cost. In many cases you will get those Dead Beats paying like clock work. IMHO I think people accept a early payment discount in a more favorable light than a Late Payment charge. Yet the results are the same.

RigglePLC
12-22-2010, 11:01 AM
Early pay discount--good idea, Ric. And yes, let the post office do the work, if you don't like to call. A well-reasoned letter, followed by more demanding letters are easiest. Write your letters this winter when you have the time.
But this year consider a more modern approach--get email addresses--send them an email asking for payment. Attach you picture--it makes it more personal. And of course promise to correct any problems or concerns they might have with weeds crabgrass etc.
Perhaps offer an incentive if the check arrives within 7 days.
True--I hate it when I have to skip a customer--and then he pays next week and I have to go back to the same street. Chances are its in bum fudge acres, too. UGH!

Ric
12-22-2010, 12:13 PM
I am not saying we don't have our share of Dead Beats here in Florida. Trust me we got a lot of Dead Beats Here, so don't get me started. But Just a little slam on the TG/CL Wannabes with their 30 years of Misinformation. If you have a Tight High Margin Smaller Upscale Route, you cull those PITA dead beats. I don't want customers.............I want GOOD customers.

Barefoot James
12-22-2010, 05:20 PM
Real Green is the Mac daddy of software programs - I'm little, use Gopher - works great for me. On the glass is half full mentality - at least we all know who owes us - right! Call them up and keep calling.

americanlawn
12-22-2010, 06:02 PM
Hi buddy - I typed up a very detailed explanation of how we have dealt with all the questions/headaches you are experiencing. But the site went dead. Don't feel like typing anymore. Not sure what's going on. :confused:

I will be the first to admit that I love selling and love working...but I HATE paperwork!

I have done a poor job in the past on staying on people that owe me...but I have always gotten paid.

How do you guys handle your past due accts?

I get busy during the season and don't do a great job of tracking who is paying.

I have about 12 customers that are past due for over 120 days and about 30 that are between 60 and 90 days. It isn't for a large amount but it is plenty!

I have never had any issues with people paying at all.

I started calling them yesterday and got a pretty good response but we will see.

Do you all send out Statements and if so...how ofter?
How do you handle later payers?

Now that I am getting bigger I want to keep this in check next season.

Any help on what you do to take care of late payers would be greatly appreciated.

Thanks,
RC

sedge
12-22-2010, 07:26 PM
Hey guys, it's not rocket science, that is why you take credit/debit cards.

I will only take on customers if they have a debit/credit card on file and will not do the next round if there is no money to charge the last round. Production gets run every night and we will try to charge cards that don't run the first time, every night with the next days production until it runs. We have even run cards a year later and they finaly run. Now of course they are pissed off, but we at least got our money.

Real Green is the cat's meow :)

ted putnam
12-22-2010, 07:42 PM
Hey guys, it's not rocket science, that is why you take credit/debit cards.

I will only take on customers if they have a debit/credit card on file and will not do the next round if there is no money to charge the last round. Production gets run every night and we will try to charge cards that don't run the first time, every night with the next days production until it runs. We have even run cards a year later and they finaly run. Now of course they are pissed off, but we at least got our money.

Real Green is the cat's meow :)

I can't see myself Forcing the credit/debit issue. What I CAN see myself doing is offering it as an option, in day to day business as well as collection situations. Not everybody wants to give out their numbers and I really don't blame them. I feel that by REQUIRING it, I would probably limit my business to some degree. JMO
Receiving credit/debit payments would definitely help

sedge
12-22-2010, 07:50 PM
I can't see myself Forcing the credit/debit issue. What I CAN see myself doing is offering it as an option, in day to day business as well as collection situations. Not everybody wants to give out their numbers and I really don't blame them. I feel that by REQUIRING it, I would probably limit my business to some degree. JMO

We were at 565 customers or so when I left my brothers company and in the 4 years I was there, I think we had 8 or 9 refuse to give their numbers. You still can do those on credit if you want, but sure is a money saver and a hassle reduction in paper works not to. No bills to mail out so you save about $0.75 right there alone not counting labor.

In the end you might be 2 to 3% smaller, but with almost no bills to mail out and far fewer calls to make, I think it is more then worth it.

Turfdoctor1
12-22-2010, 10:15 PM
We were at 565 customers or so when I left my brothers company and in the 4 years I was there, I think we had 8 or 9 refuse to give their numbers. You still can do those on credit if you want, but sure is a money saver and a hassle reduction in paper works not to. No bills to mail out so you save about $0.75 right there alone not counting labor.

In the end you might be 2 to 3% smaller, but with almost no bills to mail out and far fewer calls to make, I think it is more then worth it.

I have just started offering CC processing, (1) to help with slow payers (2) simply because of demand. But, I am confused as to how this could possibly be a money saver. I hope you are right. But, for us, I am expecting it to cost me $5-6K this coming year in processing fees. We bill at the door. I'm not how postage or labor on billing. Not sure how this is a money saver.

Not trying to hyjack this thread, just curiuos if I am doing something wrong on my processing.

To rcreech...We are all in the same boat, I think, bad with the paper work. Then, this time of the year when we are doing some sitting we realized that our "loyal" customer base is not as great as we think!!

ted putnam
12-22-2010, 10:46 PM
I have just started offering CC processing, (1) to help with slow payers (2) simply because of demand. But, I am confused as to how this could possibly be a money saver. I hope you are right. But, for us, I am expecting it to cost me $5-6K this coming year in processing fees. We bill at the door. I'm not how postage or labor on billing. Not sure how this is a money saver.

Not trying to hyjack this thread, just curiuos if I am doing something wrong on my processing.

To rcreech...We are all in the same boat, I think, bad with the paper work. Then, this time of the year when we are doing some sitting we realized that our "loyal" customer base is not as great as we think!!

That's the truth, but it could be worse. We could be in a factory somewhere making "widgets" I can remember college professors talking about them. Did anyone ever find out what a "widget" is?

tlg
12-22-2010, 10:51 PM
Customers that pay late are without question the biggest nuisance we have to deal with. One of the things I have noticed is that the same customers continue to be repeat offenders year after year. The best method I have found is getting as many customers to prepay for services well in advance before our season begins. We generally have about 65% to 70% prepay rate each season. This eliminates a whole lot of extra paperwork. I might also add that we will offer a prepay to any customer throughout the entire season ( with a discount ) just to get the money in our hands.

Our billing process is pretty simple.

1) Invoice is left a door on day of service. Payment is due at time of service. The customer has ten days to pay. After ten days we would like the customer to add a $5 service charge. ( they rarely do this )

2) A statement is sent after 30 days late and the $5 service charge is added. We advise them their service may be delayed if not promptly paid.

3) If we have not be paid within 45 days we will generally do another service for a customer with a balance if they have a history of slow paying and the customer has been with us for a least one season. If any customer gets behind more than two services or applications we will not service again until paid.

4) Statements are sent at 30, 60, 90, and 120 days. The latter they get the more threatening.... collection etc...

5) Phone calls start at 60 days late and continue till paid. After 120 days we will cancel and send to collection.


We review all the late payers each winter and raise their price accordingly. If they want us to be their bank and bookkeeper we need to get paid more. If this encourages them to move on and be some other companies problem so be it. I have placed some really bad payers on prepay only status. This too may encourage them to be somebody Else's problem. I don't like to cancel slow payers... it just not a good practice IMO . I let them cancel if they don't like our terms. No payers can't be gone fast enough.

Barefoot James
12-22-2010, 11:19 PM
Just use a paypal account they can pay you through paypal and it would cost 3% - then you don't have to worry about having all the CC set up charges, etc. I guess if you do big business it would be cheaper but paypal @ 3% is what I get. I only have a handfull of folks who use it - the rest send me checks.

MacLawnCo
12-23-2010, 10:02 AM
I cant swallow the cc processing fees; my alternative is ACH (electronic w/d from their checking).

I swear to you, my application clients going forward are prepay or ACH only. Im not going to mess with getting my money. I have way better things to do. For ACH, the plan is to hit every account at the end of the week in which production was done. The money is then in my acct the next monday. Its $10 per batch and then a few cents per acct drawn from.

Ric
12-23-2010, 11:26 AM
I cant swallow the cc processing fees; my alternative is ACH (electronic w/d from their checking).

I swear to you, my application clients going forward are prepay or ACH only. Im not going to mess with getting my money. I have way better things to do. For ACH, the plan is to hit every account at the end of the week in which production was done. The money is then in my acct the next monday. Its $10 per batch and then a few cents per acct drawn from.

I am beginning to notice cool season guys might be better off flipping burgers for the man. I mean to resent or maybe even can't afford to pay a 3 % fee to increase cash flow is really poor. Some how I can't see working my butt off for peanuts.

rcreech
12-23-2010, 12:01 PM
I am beginning to notice cool season guys might be better off flipping burgers for the man. I mean to resent or maybe even can't afford to pay a 3 % fee to increase cash flow is really poor. Some how I can't see working my butt off for peanuts.

I totally agree!

I discourage CC use as much as possible and even have some thoughts of getting rid of it!

If I were to add a late fee of 1% per month...then ask them to use a CC that would help offset the charges and I would get paid.

I like the thinking there!

Thanks for all your input on this topic guys!

sedge
12-23-2010, 12:26 PM
I have just started offering CC processing, (1) to help with slow payers (2) simply because of demand. But, I am confused as to how this could possibly be a money saver. I hope you are right. But, for us, I am expecting it to cost me $5-6K this coming year in processing fees. We bill at the door. I'm not how postage or labor on billing. Not sure how this is a money saver.

Not trying to hyjack this thread, just curiuos if I am doing something wrong on my processing.

To rcreech...We are all in the same boat, I think, bad with the paper work. Then, this time of the year when we are doing some sitting we realized that our "loyal" customer base is not as great as we think!!

One needs to look what you have on the books, save time/labor to make all those late payment follow ups, save on mailing costs for late payer bills and overall less stress.

topsites
12-23-2010, 12:28 PM
I will say it like this...
For the purpose of this conversation there exist two kinds of customers, and two types of companies out there:
The kind who always pay on time, and the kind who almost never do, in short this defines credit risk
so now we have the kind of company who deals with high risk credit clients, and the kind that do not.

Much like insurance companies, statistics have shown that the companies who do accept credit risky customers
also tend to charge more for their services, that is just how it is and it makes sense, they still have to make a
profit and in the end nobody is really getting away with anything.
The hidden clue in all of this is that the companies that don't deal with credit risks tend to have lower prices.

Speaking for myself I believe in the reward system, that is...
I like to believe that customers who always pay on time should be rewarded.
And unfortunately that has ultimately led me to be the kind of company that,
quite simply does not deal with high risk customers who may or may not pay.
Which results in my being able to offer my services at a lower price, for
those who can, and are always willing to pay.

I hope that made sense, not that I expect anyone else to do things that way,
this is simply how I do things.

Paper work has always been my draw back. Glad I am not alone in this.

You can add me to the list.
Oh I forgot, I guess nobody's keeping track.

lawntennis
12-23-2010, 08:42 PM
There is nothing I hate more than calling delinquent customers and asking to get paid. That is why I pay a young lady to make those calls for me. She once worked for a local phone marketing company and makes the calls really quickly and effectively. I will never make a delinquent call again. It is worth every penny.

americanlawn
12-25-2010, 06:03 PM
Peachtree accounting works very well for us. We require a 15-day net, except for commercial accounts and those on fixed income who notify us in advance.

After 30 days of non payment, we begin sending "late payment" letters twice per month which also include late fees to cover our costs. Keep in mind that this is OUR money, and NOT the customer's money.

After 90 days of non payment, we switch into "high gear". This means either filing small claims or filing a mechanic's lein. Our bad debt accounts are extremely low because of this, and our accountant is pleased.