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View Full Version : Fee for Billing, will it work?


kdbetters
01-20-2005, 04:52 PM
I did a strenous search and could not find exactly what I was looking for so I just have to post this.

This up coming season I really want to push credit/debit card billing for my customers instead of monthly billing. The ones I have on monthly billing I will keep, however New Customers I will charge a 10% billing fee and a $25 late fee. I am doing this in hopes to discourage customer not to do billing. I am not going to even mention the billing option to them, but if they ask I will let them know that we can but those are the guidelines. I just don't want to lose any customers because I don't want to bill. So in essence I can say that I have payment options, but they will not want the billing, but if they do then I can benefit because I will recieve extra revenue for the convenience and the hassle of billing.

What do you guys think?
Would you do it or not?

marko
01-20-2005, 05:08 PM
I will be trying this (credit card only) this year. As its my first year w/ no customers, I might have to accept checks and will for a good account. I however and going to attempt to thrive on volume and next year will not give them an option (other than prepay for the year cash!)

dforbes
01-20-2005, 05:24 PM
Good luck, I hope it works but to be honest if I were your customer and you told me this I would be looking at other companys. You would just p*#$ me off.

cklands
01-20-2005, 05:35 PM
I think that you will probably offend a lot of customers that have been with you for a while that pay on time. I would try it with new accounts first before you push the issue with accounts that you have had for a long time. See ehat kind of reaction you get from the new accounts. Good Luck.

Fantasy Lawns
01-20-2005, 05:53 PM
I have found that wording is key

I offer a discount fore payments recieved by the 20th ..... we bill monthly down here n say i have an account I need $100 monthly fore ..... I bid it it at $115 but offer a discount to $100 when payment recieved by or before the due date

kdbetters
01-20-2005, 06:15 PM
I think that you will probably offend a lot of customers that have been with you for a while that pay on time. I would try it with new accounts first before you push the issue with accounts that you have had for a long time. See ehat kind of reaction you get from the new accounts. Good Luck.

Actually it says in my original in the post that this will not affect my current customers only the new ones. Basically I want all the new customers to go only with credit cards. Many companes implement this sytem and are very successful. However I am not in a position right now to turn down business.

Tvov
01-20-2005, 06:20 PM
Is using a credit card for paying for landscaping/lawn service common in your area? It is not very common around me, especially for mowing services. If I restricted customers to it, I think I would lose most of my regular maintenance customers.

Have you talked to the credit card companies about setting things up? Or are you already set up for that?

kdbetters
01-20-2005, 08:09 PM
Is using a credit card for paying for landscaping/lawn service common in your area? It is not very common around me, especially for mowing services. If I restricted customers to it, I think I would lose most of my regular maintenance customers.

Have you talked to the credit card companies about setting things up? Or are you already set up for that?

I am already set up to accept them, however, there is no standard you know that. Some companies except them but it is optional, some companies do not accept them, some make people prepay, some do billing, its all different around here. However I am about 45 minutes away from JustMowing, and I have personally talked with him, bought some of his equipment and seen his set up. I really like his set up. We target the same type customers, residentails under 12000 sq ft. He now requires all new customers to pay with credit/debit cards. However it took him more than one or two years to come to that point. Like I said I can do billing, I just want to discourage it.

dforbes
01-21-2005, 12:35 AM
after reading fantasy lawns post I think he is saying tell the customer (just an example) the cost for your lawn is $35.00. However if you pay with a credit card it will only be $30.00. Put in your own numbers. I think this aproach may work. people are always looking for a bargin. This is totaly differant than your post, and I would seriosly consider this option. sorry my pop up blocker blocked spell check again. tying to work it out

HOOLIE
01-21-2005, 01:15 AM
Fantasy has great advice. You want to offer the customer an incentive, something positive, rather than putting a negative spin on it. I remember my first apartment, $705 a month, OR, $695 if I paid 3 days early. I'm sure they just jacked up the price 10 bucks, but so what, I was down at the rental office 3 days early each time. Now think, if they had said $695 a month, but $705 if 3 days late, I'd have paid 2 days late every time. And would have had a lesser opinion of them.

MMLawn
01-21-2005, 01:34 AM
Why would you want to do that? The reason Justmowit does it is because he has 2000 customers....how many do you have? The CC processing monthly will take just as long as billing would (again justmowit said that his wife spends 4 hours a day processing cards) and even more important why in the world would you want to LOSE the 2.5-3% that you will be giving up to the processor (Visa/MC, etc) plus the monthly maintenance and processing/batching fees? Not to mention the possibility of Charge Backs.

I have been in business a long time therefore I have a rate at 1.67% with no other fees that few can even touch and I never advertise that I can take or mention cards unless ask.

pgiambat
01-21-2005, 10:24 AM
I like the idea and got me thinking about different billing/payment options. I really don't get stiffed, a few late checks here and there but no biggie.

Sharing your billing options with new customers in a positive way will probably be the clincher. Most residentials are women and love to have options that make their lives easier.

Good luck.

Soupy
01-21-2005, 10:49 AM
Why would you want to do that? The reason Justmowit does it is because he has 2000 customers....how many do you have? The CC processing monthly will take just as long as billing would (again justmowit said that his wife spends 4 hours a day processing cards) and even more important why in the world would you want to LOSE the 2.5-3% that you will be giving up to the processor (Visa/MC, etc) plus the monthly maintenance and processing/batching fees? Not to mention the possibility of Charge Backs.

I have been in business a long time therefore I have a rate at 1.67% with no other fees that few can even touch and I never advertise that I can take or mention cards unless ask.

I agree. I only offer credit cards as a option for if they are in a pinch. Even then, they must pay using my website and Papal. I thought about even adding a 3% fee for credit card users. It's like when you call to pay the power bill. There is a $5.95 fee for processing.

Everyone wants to copy Justmowit. His operation is unique and will not work for everyone. I pray that everyone in my area doesn't start advertising to cut 12-17K lawns for $31 or start hiring foreigners (non U.S citizens). Keep that stuff in Texas.

Mueller Landscape Inc
01-21-2005, 11:25 AM
A couple years ago, I started a policy that required all new business to pay with CC's. I have no problem getting new customers to agree to this policy. The cost of this is minimal considering that the money is in my account within 48 hours. Furthermore, I am the only company in my area that has this set up and policy for this type of service. Cash flow is King!!! Having AR's that go past 15 or 30 days suck! Having payments deposited into my account every single day.... priceless!!!

Mueller Landscape Inc
01-21-2005, 11:27 AM
Also, running CC's everyday is much faster than doing the billing at the end of the month and waiting...waiting...waiting...

Tvov
01-21-2005, 11:40 AM
I thought about even adding a 3% fee for credit card users. It's like when you call to pay the power bill. There is a $5.95 fee for processing.
.

Check the laws/rules about charging for CC use. I believe at least in CT you can't charge extra for CC, but you can give a discount for cash. So basically stores just have the 3-5% included in the prices, and give you a discount when you pay cash. I know a hardware store and a liquor store that do this.