JimLewis
06-30-2000, 04:25 AM
Been since early spring since I have posted here. Way too busy for this lately. Business is incredible! But I wanted to come back briefly to let you all know of a wonderful solution I found to handle late-payers and keep accounts receivable down.<p>For the last several years (until this year) I spent a GREAT deal of time chasing down money from people. Late payers, slow payers, etc. It was killing me. Payroll would come due and I would have barely enough money to pay my employees and nothing left for me. Then I was waiting on all the late payers so I could pay MY bills. Sound familiar, guys? <p>Well, I am grateful that I finally found a solution. This may not be for everyone. And I am not pushing this on anyone. But I wish I had known about it a long time ago and feel obligated to share it with you all. <p>At the end of last year I took a few drastic measures to ensure that I would no longer have to waste time chasing down money. First, I got rid of all of my clients who were currently more than a month late. In most cases, I would collect the money and THEN cancel them. Late payers never change. They are ALWAYS going to pay you late. I finally learned that. And I finally decided that I was never going to work for them again. I don't have to. There's so much business out there these days I can be choosy. So I axed about 10 or 15 of our 120 customers. The people who were slow-payers (10-15 days late consistently) I had a talking to and explained that they had to be on time from now on. That left me with a core group of customers who were loyal AND paid me on time. <p>Next, I contracted with a local billing company to handle what's called "Automatic Payment". Simply put, a new client signs up by filling out a short form and enclosing a voided check and from that point on, their payments are made automatically each month on the day they chose. This year we offer this service to new customers. If the choose to be invoiced instead, it's $15-$20 more per month. Most every one of our new clients have chosen to go with Automatic Payment as a result. And a good 10 or so of our old ones have too. Next year, we are going to make it mandatory for all new customers. I can't say enough about this method of billing clients. It's so smooth. The billing company who does it for me does do work for companies all over the US so if anyone wants more info, email me. <p>Another thing I did was reward the early payers. You know. The ones you love! The people who - the day they get their bill - send you a check back in the mail. Or anyone who had consistently paid early or on time every single month, without exception. As a New Year's gift, I sent them all a nice thank you letter and gave them all $25 gift certificates to use on any "side job". This was great because it encouraged them to think of additional work they needed done and we got more business as a result. <p>Finally, I keep a tight lid on NEW late-payers or slow payers. I have a zero tolerance policy. If someone pays more than 10 days late once, they get a late fee and a polite letter explaining that future payments need to be on time. If someone does it 2 or 3 times they are given the option to sign up for automatic payment, pay each month in advance, or we will not work for them anymore. Again, I put this in a way that is very polite, but gets the point across. Amazingly enough most people have admitted they were wrong and elected one of the first two option. One lady resented the letter and we don't work for her any more. Her loss. <p>One more thing I should add is this year we made it clear that for all side jobs or major landscaping, payment was due in full the day of completion. I enforce that stringently as well. <p>End result - Accounts receivables are the lowest I've ever had. I never have to struggle to meet payroll. There are virtually no late payers and only a few minor slow-payers. I get my money on time now every month. Another nice benefit is there is a lot less paperwork. I don't send out invoices for the Automatic Payment clients unless they request one. <p>Another awesome benefit is that I now get a lot of payments in the middle of the month. Before, I was always getting paid at the end of the month by everyone. Well, with Automatic Payment people get to choose their own date for payment. Over 50% choose the 15th for obvious reasons. So now I get money every day of the month and a good deal of it is now in the middle of the month! <p>I hope this can help some of you. It's been a dream come true for our company. It was horrible last year and it's 100% better this year. <p>Jim Lewis <br>Lewis Landscape Services - OR<br>email: jim@lewislandscape.com<br>http://www.lewislandscape.com<p>----------<br>Jim Lewis - Lewis Landscape Services<br>http://www.lewislandscape.com