Originally Posted by 205mx
What you can do AW to eliminate some of that, is when you first sign up a customer, have them pay for their first mulch service up front.
the next year, you will be getting paid ahead of time in January and February for mulch in the first part of spring.
how does that sound? A little better than having to wait i agree.
If I understand you and whiffyspark correctly, the client's mulch for the year is billed at the beginning of the year or prior to the year starting and the client pays upfront for the mulch material.
Landscape and hardscape jobs (and sometimes mulch jobs) are paid for at the time of service.
But other materials like fertilizer and plants are not paid for up front…those material are paid over a 12 month period.
So if I have this correct the following line items for the year are added up and divided by 12 or 8 to arrive at a flat monthly charge:
Spring/Fall clean-up/leaf service
So you add all that up for the 38 weeks (or however many weeks you have) and divide that by 12 to arrive at a monthly fee that will be billed each month. Do you guys bill in advance for the month or bill for the current month? Are you collecting any portion of the 12 months up front? Does the client pay you January at the time the contract is signed and February is billed in January due February 1st or due some time before February? (< that part really intrigues me) How do you structure your billing?
Now here is where I get lost on this (this might get answered in the billing questions above): If all that work is completed by let's say November first, what is the benefit of waiting one and a half to two additional months until the middle or end of December to collect 1/6th of the money that is owed for the work that has already been performed?
I also understand that some people also add in winter services like snow removal…So even if you add that in you are still waiting for 1/6th of the money from the bulk of your services (see list above) and the client has prepaid 5/6th of the winter service but still has 1/6th left to pay on winter services…assuming you are billing the 12 months on a calendar year and are not billing March 1 to February 28th or something like that…If you are, please specify that for me.
And I am totally baffled by this statement "Obviously 12 will have a lower price, but it helps in the winter." "Helps" how?
Thanks for your help guys…I'm just trying to wrap my head around this.