PDA

View Full Version : Pay up front! or no mow for you.


exmarklover
02-18-2004, 08:49 AM
OK, how many of you guys make people pay up front? I have run a video production company for 4 years now and every person or company pays me ALL up front before I even break out the equipment, now having said that I am mowing some commercial lots, and from the way I understand it most of you bill after the job is done. Does anyone bill a week of month in advance to protect you from getting ripped off? And I don't want to hear you have a contract because I have been down that road and you do not all ways win (some lie in the Court room! Shocking I know). Just some thoughts please.

sbvfd592
02-18-2004, 08:55 AM
neaver thought of it. i never pay for anything up front

exmarklover
02-18-2004, 08:57 AM
a lot of utilities make you pay a month up front.

John Gamba
02-18-2004, 08:59 AM
Originally posted by exmarklover
OK, how many of you guys make people pay up front? I have run a video production company for 4 years now and every person or company pays me ALL up front before I even break out the equipment, now having said that I am mowing some commercial lots, and from the way I understand it most of you bill after the job is done. Does anyone bill a week of month in advance to protect you from getting ripped off? And I don't want to hear you have a contract because I have been down that road and you do not all ways win (some lie in the Court room! Shocking I know). Just some thoughts please.

Thats the one thing about this mowing thing that sucks:mad: If we got together and demanded payment up front it would be alot better.
I think you will have a hard time doing it because of all the losers in this business.
John

WeatherMan
02-18-2004, 08:59 AM
dont think you will find to many customers that way

rodfather
02-18-2004, 09:22 AM
Pay up front? You're kidding, right? Hell, I can't get most of them to pay on time...

sproutlscape
02-18-2004, 09:31 AM
Originally posted by rodfather
Pay up front? You're kidding, right? Hell, I can't get most of them to pay on time...

I do have 1 doc's office that pays up front for mowing. Get ride of the part-time guys, losers, non-tax payers in this business and just maybe the real businesses owners could demand something like this.

yz250fpilot
02-18-2004, 09:34 AM
I had a customer last year that paid me monthly in advance. It was nice to not have to worry about collections on that account. I know it worried me when I left a bill at one customer's home and saw a notice that his utilities were turned off due to non-payment. However, I was promptly paid by him. Some people slacked on their timeliness for payment, but I have not had a "non-payer" yet. The first one I get .......gets a salted lawn. :) Advance payments would be nice. They would alleviate all worries.

Just Cut
02-18-2004, 09:38 AM
I have been receiving advanced payments for a couple of years, Why should I spend extra time chasing money around. no pay no mow:)

mtdman
02-18-2004, 09:43 AM
I get about 25% of my customers to pay up front for the season in advance. Other than that, I make 'em put down a deposit if they continually pay late.

dylan
02-18-2004, 10:47 AM
95% of my lawn customers pay up front. 100% of my snow customers pay up front. Landscaping jobs require half on signing. It took me years to achieve this and I lost a few along the way but it is worth it to me.

coonman
02-18-2004, 11:50 AM
We have several that come out and pay us when we finish. The rest we just leave a bill on the door.

TreffertLawnWrx
02-18-2004, 11:57 AM
In you're production i'd defineatly make them pay up-front. there is nothing to stop after you're work is complete. However, if some one does'nt pay you can always stop mowing/plowing for them!

mowerman90
02-18-2004, 12:23 PM
I do nothing but residentials and since 1989 made all of my customers sign a yearly contract and pay by the month in advance. I get 95% of my cutomers from referals so most people know in advance that I can be trusted. Attached is my contract

Lux Lawn
02-18-2004, 12:37 PM
Originally posted by rodfather
Pay up front? You're kidding, right? Hell, I can't get most of them to pay on time...


I agree with rodfather I would just like to be paid on time.

The only way I get paid in advance is if a customer is going on a long vacation and doesn't want a big bill when they get back.

exmarklover
02-18-2004, 02:16 PM
Here is a monkey wrench in all that, what if you do not conplete a months work of instance November you only work 3 weeks and not 4. Do you give them there money back?

JimLewis
02-18-2004, 03:53 PM
If you think you can make a big successful business out of making everyone pay up front, heck, more power to ya. Good Luck!

Personally, I almost never pay for ANYTHING up front. And I'd be offended if someone asked me to.

I think you'd be a lot better off making the pay-up-front idea an OPTION instead of making it mandatory. It would work like this; Suppose you have a property where you want to make $100 per cut. So then you'd produce an estimate that had two prices. It would read something like, "The price for your lot is $115 per cut - OR you can save $15 and pay only $100 per cut if you pre-pay!" NOW, the client has an option. AND he has an incentive to pre-pay. He doesn't HAVE TO. But if he does, he saves a gob of money. People aren't stupid. They'll take the savings 90% of the time. Then you're not forcing anyone. It's their own choice. And for those who don't chose to pre-pay, you're making an additional $15 more than you wanted to just to deal with the problems involved with invoicing.

John Gamba
02-18-2004, 03:57 PM
Jim
Would you pay a Lawyer up front?
John

tiedeman
02-18-2004, 04:04 PM
We never ask them to be paid up front. It's a slap to their face

JimLewis
02-18-2004, 04:25 PM
John,

Yes, I would. You'll notice that I said "almost never". There are very few exceptions where I would pay up front. But I can't think of any where I'd pay for a service (e.g. lawn care, house cleaning, etc.) up front.

TaylorLawn
02-18-2004, 04:42 PM
Originally posted by sproutlscape
I do have 1 doc's office that pays up front for mowing. Get ride of the part-time guys, losers, non-tax payers in this business and just maybe the real businesses owners could demand something like this.

Let me know when they are gone.

promower
02-18-2004, 04:42 PM
Late payers, not just a few days but the ones where I get there money just before I send out next months invoice will be paying up front this year. They get a month behind then the final invoice I dont get for 3 months, I hate that.

John Gamba
02-18-2004, 06:09 PM
Jim
I think everybody should pay upfront, That way nobody in business will have to run around for there money.
Why would you pay a Layer first and not the minimum wage lawn guy?
Lawyers rip people off everyday! And you dont see them on ebay trying to sell there stuff because someone didnt pay them or the check didnt come on time.

John

Oh got you down first for the rental in St Thomas. I will need payment in advance.lolol

JimLewis
02-18-2004, 06:43 PM
Yah, that's all well and good, John. But we both know the world doesn't work tht way. Most LCOs don't charge up-front for their work. And most people won't be willing to pay up-front for their work. That's just the way it is. I think it's niave to assume that you'd be able to run a successful LCO business with a policy that says everyone must pay up front.

mtdman
02-18-2004, 07:24 PM
Originally posted by JimLewis
Yah, that's all well and good, John. But we both know the world doesn't work tht way. Most LCOs don't charge up-front for their work. And most people won't be willing to pay up-front for their work. That's just the way it is. I think it's niave to assume that you'd be able to run a successful LCO business with a policy that says everyone must pay up front.

I used to think that too, but I have learned lately that if your customers value your service, they'll pay up front to get that service. I charge a deposit up front for snow, and people pay it without blinking. I get over $10000 a year up front from my customers on prepay. I used to think no one would go for it, but you never know until you try. And having money up front and ahead of time eliminates a lot of stress of billing/collecting.

JimLewis
02-18-2004, 07:49 PM
Ok. But is it your company policy that a customer must always pay in advance or you won't work for them??? Every new customer pays this way?

fga
02-18-2004, 08:15 PM
I might have some new customers pay up front. I got burned last year a few times:angry: :angry:

exmarklover
02-18-2004, 09:31 PM
Are you kidding me! Think of all the things you pay for up front.
1. Groceries
2. Resturant
3. Gas
4. alot of utilities
5. Any store (even you local tractor store).
6. my mowing
Just about everything you buy you pay for up front. It only makes good business sense. I am not in the green to not make any. No free mow's for you!

lawnman_scott
02-18-2004, 09:52 PM
Everyone pays me up front. One month in advance, except for commercial. Now that would be tricky. Someone said it would be a slap in the face to ask, I say its a slap in the face to question it. I dont need the ones that dont.

mtdman
02-18-2004, 11:02 PM
Originally posted by JimLewis
Ok. But is it your company policy that a customer must always pay in advance or you won't work for them??? Every new customer pays this way?

For snow, yes. Mowing, no. My point is, you never now exactly what a customer is willing to accept until you try, and I've found you can usually find customers willing to abide by your terms if your service is quality.

:D

Tbarchaser
02-18-2004, 11:11 PM
All but one of my cust pays in advance.
I took Mowerman09's advice last year and I am glad I did.

1 out of 120 did not want to! and I have not had any cust question it (except one) All of these 120 cust have been added in the past 11 months also.
When you used to pay rent...you paid first,last, and security!

Miller
02-18-2004, 11:16 PM
Are YOU kidding me? Think of all the things you DON'T pay for up front.

1) House cleaning
2) Window washing
3) Plumbing work
4) Gutter Cleaning
5) Pressure Washing
6) Tree Work
7) Chimney Sweeping
8) Roof Treatment
9) Duct Cleaning
10) Pool Maintenance
11) Carpet Steam Cleaning
12) Dog Doo Removal Service
13) Interior Design
14) Appliance Repair
15) Appraisers
16) Inspectors
17) Electrical Repair / service
18) Pest Control
19) Drain Clearing
20) Well / Pump Maintenance
21) Monthly Security System Service
22) Monthly Cable or Satellite TV Service
22) Mechanic Work
23) Newspaper delivery
24) Electricity
25) Natural Gas
26) Sewer
27) Water
28) Telephone
29) Cell Phone
30) Cable or Satellite TV Bill
31) Monthly Gym Membership

I could go on and on and on. But you'll note that the first 20 or so types of services are all much more closely related to Lawn Maintenance than any of the things you listed, Mr. ExmarkLover. These are all small dollar home maintenance kinds of services.

The only kind of Home Services where it's normal to pay up front is for big ticket items in the thousands of dollars, like landscape installs, painting, sprinkler systems, concrete installs, roof installs, fence installs, deck installs, etc. and even then it's usually no more than 1/3 or 1/3 down. You still pay for 1/2 or more of the service after it's completed.

Tbarchaser
02-18-2004, 11:32 PM
Sorry sir, If you dont want to pay in advance Im sure there is someone that will let you pay when YOU feel like it.
Frankly we dont operate like that. Here is my card, have a nice day and good luck.

I have not had to say that yet.
I dont see why all of you dont use pre-pay, you are wasting you time with trying to collect.

If I have a cust that does not pay by to 10th then I stop service!
Simple I am only out one cut. You guys can get 2-3 months out.

JosephE
02-18-2004, 11:56 PM
i refuse to take payment up front, i feel that the custome should see my work then judge what they feel they should pay me

mowerman90
02-19-2004, 12:04 AM
And now, to add even more disbelief to this thread..........
I have several customers that pay for the entire year IN ADVANCE.

lawnman_scott
02-19-2004, 12:11 AM
Originally posted by mowerman90
And now, to add even more disbelief to this thread..........
I have several customers that pay for the entire year IN ADVANCE.

Whats disbeleivable about it? In my opinion if your not getting paid in advance your hurting yourself, especially in the great state of Florida where we are.

Kastlegrounds
02-19-2004, 12:14 AM
All of my customers are residential... I give the customer a choice... weekly or monthly... billable at the end of the month... either way the quote works out to be the same, given there are 12 months or 52 weeks in the year... and I don't bill for rainy days where I can't work... which I fill in with fertilizing when I can... here in California that equates to about 2-3 rainy weeks a year... but I do give a slight discount for monthly contract... fortunately all my customers have a check ready the last week of the month except one... who is in the process of being liened for a piddly amount of dollars...

JimLewis
02-19-2004, 02:51 AM
And now, to add even more disbelief to this thread..........I have several customers that pay for the entire year IN ADVANCE.

There's nothing ubelievable about that. I don't think there is a problem with people paying in advance if they want to. I have a good dozen customers who pay for the entire year in advance every year. That's not the issue here. The issue is making pre-payment mandatory. Just look at the title of this thread, "Pay up front! or no mow for you!"

Having a firm policy that says we won't do ANY lawn care work until you PRE PAY us, is just rediculous. Some can afford to get away with it. But most people on lawnsite would face some serious opposition and lose a large percentage of their bids if they changed to this policy.

That being said, I HIGHLY recommend anyone in MY area institute a mandatory pre-payment policy. I'd LOVE it if my competition did this. :D

alpine692003
02-19-2004, 03:24 AM
How would you guys deal with a job that is $800 and a new customer?

would you guys say, we ask for 50% up front and the last 50% upon completion of maintenance service?

dkeisala
02-19-2004, 03:36 AM
Originally posted by alpine692003
How would you guys deal with a job that is $800 and a new customer?

would you guys say, we ask for 50% up front and the last 50% upon completion of maintenance service? Yep - as a matter of fact, I have a repeat customer that wants some pruning done. We agreed on a price and he was suppose to get me a 50% deposit before he left for Costa Rica for a month. Never received to check so work didn't get done. If he is still interested when he gets back, he can give me a call.

alpine692003
02-19-2004, 03:37 AM
Thats good to know to ask for 50% deposit before I begin the job...

What if they get offended? I just say well, we do this to all new customers, after the 1st few times we dont do it anymore?

dkeisala
02-19-2004, 03:43 AM
Umm - because this is a business and we don't work for free, because we don't have a working relationship with you and nothing personal but.....

alpine692003
02-19-2004, 03:51 AM
good answer!

I'll use that then!!

I'm lonely, someone come to chat!

JimLewis
02-19-2004, 03:58 AM
I don't ever get 1/2 down unless the job is over $800. And in 8 years I've never had a customer not pay for a big job like that either. The only people who sometimes don't pay is regular month-to-month maintenance customers. And I always collect from them in the end.

alpine692003
02-19-2004, 04:08 AM
well, i've never dealt with this customer before..

this job will be $800 if I get it!

I'm not sure what to say; give me up front or wait til I finish job, I know its my call..

dkeisala
02-19-2004, 04:09 AM
50 now, 50 when the job is done - keeps everyone honest

alpine692003
02-19-2004, 04:11 AM
Thats what i'll be doing for jobs over $500, that's going to be my policy now..

I've read too many topics bout people not paying and skipping out and you've lost out $$$ ..

My dealer even saids to ask for 50% up front for jobs over $500 ..

mtdman
02-19-2004, 04:12 AM
It depends on if $800 is a big job for you. I tend to favor the 50/50 idea myself.

alpine692003
02-19-2004, 04:14 AM
Yep, i'll do that to new customers only..

But If after I've dealt with them after a few times, I will trust them and ask for payment when the job is completed!

dkeisala
02-19-2004, 04:15 AM
I like to be able to trust people but not to the extent that I stand to lose money. If we have a prior working relationship and everything worked out well, I'm more willing to extend you credit because this is exactly what I'm doing, extending someone credit and with all credit transactions there is an inherent risk, usually to the one extending the credit.

alpine692003
02-19-2004, 04:17 AM
Yep! dkeisala check your PM!

Its just like my dealer, he puts me on credit after we had a certain amount of trust!

I asked him about purchasing a new shinny articulating hedge trimmer for $750, he said he could bring it in and have it ready for me on monday.. I was like nah.. just hold off..

If it were to be dealt with in the beginning, he wouldn't ahve brought it in!

Its that level of trust you have with customer/client!

John Gamba
02-19-2004, 07:42 AM
[QUOTE]Originally posted by JimLewis

That being said, I HIGHLY recommend anyone in MY area institute a mandatory pre-payment policy. I'd LOVE it if my competition did this. :D

See Jim
That comment is boarder line SCRUB. If everybody got together and said less get it in advance!! It sounds like you would be sitting there rubbing your hands saying i'll go out tomorrow and BILL everybody???
Just like someone that pays nothing is underbidding you. I know what you are saying, But we are talking about CHANGING the future???

John

dylan
02-19-2004, 10:19 AM
I'm also a fan of post dated cheques. One bill at the start of the season. Several post dated cheques. Saves extra billing if the amount is the same each month and less work for the customer and I. They don't have to worry about paying each month and yet the money does not come out of their account until it is suppost to.


To elaborate on my previous post: I do extend some very limited credit on mowing. We start cutting mid to late april and the first payment is due May 1. So they are getting 1-2 cuts before the payments kick in. They pay at the start of each month; jun1, jul1 etc with the last payment being Nov 1. In this way, I have almost a months payment before the month starts. We usually have stopped cutting by then and it gives the customer a feeling of control by paying at the end of the season. (post dated cheque)

Commercials are still billed the old way.

For hedges, odd jobs and stuff I still send out a bill after I have done the work.

JimLewis
02-19-2004, 11:56 AM
John, I guess I just disagree with the whole premise. I don't think people should have to pay in advance for service. It's not very common with other kinds of services. I know it ticks me off when I am asked to pay up front for anything - even at the Dr. office or a Hotel. Thank God not all Doctors and Hotels ask for that.

I understand the frustration of not getting paid on time or at all. But that's why I instituted AutoPay (http://www.lawnsite.com/showthread.php?s=&threadid=36542&highlight=autopay), so that I wouldn't have to deal with it anymore. But even with that, I offer it as a choice. I don't believe in cramming things down people's throats. I also want to land every possible customer. And there are some really great customers who just don't want to pay in advance or pay via autopay or any of that. I want to land those customers too. And I make another 10% on them because of the hassle and risk involved with invoicing.

coonman
02-19-2004, 12:55 PM
We had one customer pay in advance through the month of Oct last year. Problem is the last two weeks of Oct the bermuda was done and did not need it. We then were faced with cutting him a check and sending it to him or calling him and asking him if he wanted the first two next year free. I would hate to have this happen on all 100 accounts. We don't do contracts, so for us it is much easier to bill after the service has been completed. I guess we are lucky, but we have had no problems getting paid.

dkeisala
02-19-2004, 02:33 PM
Originally posted by JimLewis
John, I guess I just disagree with the whole premise. I don't think people should have to pay in advance for service. It's not very common with other kinds of services. I know it ticks me off when I am asked to pay up front for anything - even at the Dr. office or a Hotel. Thank God not all Doctors and Hotels ask for that.

I understand the frustration of not getting paid on time or at all. But that's why I instituted AutoPay (http://www.lawnsite.com/showthread.php?s=&threadid=36542&highlight=autopay), so that I wouldn't have to deal with it anymore. But even with that, I offer it as a choice. I don't believe in cramming things down people's throats. I also want to land every possible customer. And there are some really great customers who just don't want to pay in advance or pay via autopay or any of that. I want to land those customers too. And I make another 10% on them because of the hassle and risk involved with invoicing. Sounds like a pretty sound business practice to me. Just checked out your long ago post of Auto Pay (also mentioned on your post) and sounds like a wonderful idea. I do have several clients who pay via bank draft but an Auto Pay would seem to give the service provider more control over the payment process and could be sold to the potential new customer as just "one more way we help to simplify your life".

John Gamba
02-19-2004, 03:46 PM
Jim
I see your point. i would really like to get paid as service is rendered.
I had a repo, trespass company when i was 20. I made a lot of money because people would have to pay me CASH to get the car back. If they didn't pay me today it would go up. I put this in the line of Layers they get payed in advance so there no way they get ripped off even thow they give NO GUARANTEE.
I would like to know why it doesn't bother you to PREPAY a layer??
John

TwoBrothersLC
02-19-2004, 03:57 PM
We offer a pre-pay discount. If the account pays before the 1st of each month, they can deduct 10% off the monthly bill. Most of my customers like that format. I would say that about 60% of them use this.

Soupy
02-19-2004, 05:21 PM
JimLewis, How do you figure you make 10% more for the ones that don't pre-pay or auto-pay? It's more like you make 10% less for the ones that use those methods.

I know you are going to tell me that the price is inflated by 10%, but it is impossible to inflate price on services. If the customer is willing to pay a certain amount then that is the price the job is worth to them. I mean, if you gave me a estimate on work and I seen the inflated price, I would either agree with the price or not. I wouldn't think to myself, well that is kinda high, but if I pre-pay the price would be fair.

Get my point?

Soupy

JimLewis
02-19-2004, 05:27 PM
I would like to know why it doesn't bother you to PREPAY a layer? Well, first off, I don't pre-pay my attorney. I've never had to do that. He bills me for his services at the end of each month. If the bill isn't paid in full, I get charged interest and another bill the next month. We've always had that relationship. Been working great for years.

But I do at least understand where a retainer is necessary for attorneys sometimes. Many times - especially in criminal defense - they are dealing with scumbags. Scumbags who may very well get locked up. But at the very least, they are dealing with people who have a very high likelihood of not paying after their defense is over. Similarly, in divorce cases, they are dealing with someone who is very likely going to be going through a serious financial crunch and would have trouble paying later too.

In cases like that, where the attorney has a high likelihood of not being paid by the average person in that situation, then I understand. I'd pre-pay if that was me. I'd understand that's typical and the reasoning behind it.

Soupy
02-19-2004, 05:29 PM
I'm thinking about billing the customers just like the cable company etc. does. will bill them on the first of each month in advance for service. I will give then 15 days to pay and stop service 30 days later. This way if a customer gets behind, I will save a months worth of work before having to collect.

The cable company does this, they bill you ahead of time, but if you don't pay they will continue service untill half way through the next bill.

Soupy

JimLewis
02-19-2004, 05:35 PM
Soupy, I am sorry. I don't really see your point. It's simple. I give them two prices. The price I charge for AutoPay is the price I really want to make each month. The second price I give them - the price if they want to be invoiced - is 10% more. Both are fair prices for my services.

For a typical lot around here, a customer can expect to pay anywhere from $80 per month for a total scrub on up to $170 per month for the most expensive and reputed companies. I give them my first price of, say, $135 if they choose AutoPay and $150 if they want to be invoiced. Now all I really need to make to make a profit is $135. I've been in business long enough to know that. But the higher $150 price is still within the range that people in the nicer $500,000 homes expect to get. They aren't usually fishing for the $80 scrubs anyway. When they call us, they expect our prices to be a tad on the high end. But the higher price certainly isn't out of the range of what's normal.

So on those that choose to be invoiced get about 10% or more each month than I really need to. In trade, I am taking a risk of being paid late by invoicing them.

JimLewis
02-19-2004, 05:37 PM
Soupy, I totally like that last post you made. I think that's an excellent idea. Be careful to explain it to everyone though. You don't want to lose a good customer who would have paid you 2 days late just because he didn't clearly understand the deal.

Soupy
02-19-2004, 06:30 PM
Jim, if your happy with it I am. I was just saying that you are leaving money on the table if your inflated price is what the customer would expect to pay. 10% is a lot of money when you compare it to your profit margins.

Then again, if you have a lot of trouble collecting. I guess it would be a warsh between profit collected and profit loss due to unpaid invoices.

dkeisala
02-19-2004, 07:48 PM
Originally posted by Soupy
I'm thinking about billing the customers just like the cable company etc. does. will bill them on the first of each month in advance for service. I will give then 15 days to pay and stop service 30 days later. This way if a customer gets behind, I will save a months worth of work before having to collect.

The cable company does this, they bill you ahead of time, but if you don't pay they will continue service untill half way through the next bill.

Soupy This is EXACTLY the way I do it. However, if I have a good relationship with the client, I'm not so quick to discontinue service after 30 days. But I do charge a flat 4% late fee, $5 minimum, if the payment is not received by the next billing cycle.

cutntrim
02-19-2004, 08:45 PM
Sounds like Dylan in Ontario receives payment pretty much the same as I do. For several years now I've taken equal amount post-dated cheques from residential maintenance customers. April 1st - November 1st. Commercial customers are asked to pay with post-dates (end-of-month) but only a couple do. The others are invoiced at the beginning of the month then send cheques to arrive by month's end.

No one has said that asking for that is a "slap-in-the-face", but a few have commented on it.

Customer: "So, we are to pay you in advance then?"
Me: "That's correct."
<pause>
Customer: "O.K. then."

Bottom-line is you can invoice however you want, it's your business. There's no clear cut RIGHT or WRONG, it's just a case of whether or not it works for you.

Good luck with it.