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  #1  
Old 09-04-2012, 07:19 PM
fivestarlandscapes fivestarlandscapes is offline
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Cash Flow issues..How to get paid quicker.

Hi all.
I have been in business for 3 years. Every month I look at the numbers and think Im doing well but by the time all the money comes in Ive already spent x amount on wages and fuel, fert, mulch etc. It seems like im spinning my wheels but on paper im making at least $250-$400 per day after all overhead and wages. Does anyone have a solution to cash flow issues? I bill monthly with 15 day terms. I know some companies charge credit cards per visit which I would like to do eventually. Any help would be appreciated!
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  #2  
Old 09-04-2012, 08:57 PM
32vld 32vld is offline
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You leave out whether you do commercial or residential.

I do both. My commercial pays me monthly. Instead of giving them to the 15th of the next month do what I do.

I give them two weeks from date of the last service. Example if the last time you did a property on 8/24 I invoice on the 24th and the payment is due 9/10. 5 days sooner then waiting to the 15th.

Try to get paid weekly on residential. Yes some people may not be home when you service them but why wait to bill them all at the end of the month. The more money you can have flowing in partial helps being caught in a bind.

Also make sure you have enough cash on hand to operate to cover lags in cash flow.
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  #3  
Old 09-04-2012, 09:04 PM
Duekster Duekster is offline
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It happens from time to time to all of us. Build your reserve and limit your credit
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  #4  
Old 09-04-2012, 09:14 PM
NB Lawncare NB Lawncare is offline
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Sounds like your operating to close to your limit with ar & ap. You need to look at where and when you money is spent. With a cash reserve you don't run into that problem. " my money is spent before I get it". Look to minimize your output & if you pay employee's you may want to stream line them to make them more productive. In addition. Late fees and interest are great motivators. As for credit cards look to Square.com if you have a smart phone it's easy

Last edited by NB Lawncare; 09-04-2012 at 09:18 PM.
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  #5  
Old 09-04-2012, 09:47 PM
seabee24 seabee24 is offline
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making it manditory for res customers to use credit cards helped a ton in alot of ways, this being one of them. we charge them every tuesday for any work the week before.

accepting credit cards for the monthly customers has helpped speed payments as well
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  #6  
Old 09-05-2012, 09:27 AM
Duekster Duekster is offline
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Quote:
Originally Posted by seabee24 View Post
making it manditory for res customers to use credit cards helped a ton in alot of ways, this being one of them. we charge them every tuesday for any work the week before.

accepting credit cards for the monthly customers has helpped speed payments as well
Besides the 2.7 or 3% you get a $0.25 charge for each transaction.

One dollar per client for weekly charges adds up.

You increased cash flow over profits.
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  #7  
Old 09-05-2012, 10:45 PM
seabee24 seabee24 is offline
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Quote:
Originally Posted by Duekster View Post
Besides the 2.7 or 3% you get a $0.25 charge for each transaction.

One dollar per client for weekly charges adds up.

You increased cash flow over profits.
Well yes your right, but consider the following money saving info that accepting credit cards did for us.

1. I get paid weekly by better than half my res customers. I have better cash flow, which leaves me less stressed, not as broke.

2. Those that have signed up for the autopayment, don't spend any money on mailing invoices. That's 68 cents in savings.

3. I don't drive to the bank or the p.o. Box nearly half as often. Because my credit card transactions process and deposit and are enough money to run daily operations, I don't need to check my mail or go to the bank only once per week, on average. How much fuel and time does that save? Ever work all day only to get done when the bank is closed, put the deposit off 1 or 2 days?

4. Data processing....I think I click about 6 buttons, type the word yes, and boom all processed, and the customers account is updated..... Saves at least 10 mins per day in data entry

5. Because cash flow is better I now am able to take advantage of "deals" when they come along. I buy gas 400 gals at a time, when it's cheaper. I buy my fert early when I can get a deal. I also save time and money buying when it's convenient to me because I happen to be in the area.

6. Related to the autopsy customers I now have 100% collection on those customers.

7. Related to monthly payers, I have seen my average collection date move up on average 4 days, also seen a 3% increase in actually collecting money that otherwise would have been a collections agency or lost money, because this gives the customer other options to pay.

8. I have actually sold jobs, won bids. Simply because I took credit cards and the customer needed to use that method of payment, or wanted to earn miles or what ever.

So if you have tons of money laying around I admit I do take a small loss on using the cards, and if I had money laying around maybe I wouldn't. Fact is I don't, this was great for business.

If this isn't a good idea, why do all fast food accept when 6 years ago they didn't? Just look at the studies, yes they loose some money by swipping the card, but they gain so many new customers that otherwise didn't have cash in their pocket to buy the burger
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  #8  
Old 09-05-2012, 10:52 PM
Duekster Duekster is offline
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Quote:
Originally Posted by seabee24 View Post
Well yes your right, but consider the following money saving info that accepting credit cards did for us.

1. I get paid weekly by better than half my res customers. I have better cash flow, which leaves me less stressed, not as broke.

2. Those that have signed up for the autopayment, don't spend any money on mailing invoices. That's 68 cents in savings.

3. I don't drive to the bank or the p.o. Box nearly half as often. Because my credit card transactions process and deposit and are enough money to run daily operations, I don't need to check my mail or go to the bank only once per week, on average. How much fuel and time does that save? Ever work all day only to get done when the bank is closed, put the deposit off 1 or 2 days?

4. Data processing....I think I click about 6 buttons, type the word yes, and boom all processed, and the customers account is updated..... Saves at least 10 mins per day in data entry

5. Because cash flow is better I now am able to take advantage of "deals" when they come along. I buy gas 400 gals at a time, when it's cheaper. I buy my fert early when I can get a deal. I also save time and money buying when it's convenient to me because I happen to be in the area.

6. Related to the autopsy customers I now have 100% collection on those customers.

7. Related to monthly payers, I have seen my average collection date move up on average 4 days, also seen a 3% increase in actually collecting money that otherwise would have been a collections agency or lost money, because this gives the customer other options to pay.

8. I have actually sold jobs, won bids. Simply because I took credit cards and the customer needed to use that method of payment, or wanted to earn miles or what ever.

So if you have tons of money laying around I admit I do take a small loss on using the cards, and if I had money laying around maybe I wouldn't. Fact is I don't, this was great for business.

If this isn't a good idea, why do all fast food accept when 6 years ago they didn't? Just look at the studies, yes they loose some money by swipping the card, but they gain so many new customers that otherwise didn't have cash in their pocket to buy the burger
Let me know when you get the same rate as Mikey D's when they swipe the card. If it works for you then have at it.
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  #9  
Old 09-05-2012, 11:00 PM
seabee24 seabee24 is offline
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I had a hard time at first, and on larger projects I do tell them payment maid with credit I will add a fee.

It does suck paying out some interest, but when I look at the other money savings, time savings, fuel savings, it's a no brainer.

I literally fell that accepting credit cards saves me 45 mins of time everyday and at least 1 gal of gas, and turns other dead beat customers into paying outstanding invoices.

It sucks buying spare parts too, but you know that $20.00 in random nuts and bolts sitting at your shop, will save you $20.00 the first time you need to open the bin and pull 1 single set out. After that it's just money saved
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  #10  
Old 09-04-2012, 11:19 PM
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calvinslawnservices calvinslawnservices is online now
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The way I solved this issue is having some pay on the 15th and some pay on the 30th. I bill the same month of work. For the first group I send the bills out on the 1st and due back on the 15th. This group mostly consist of new accounts and accounts that have trouble paying on time. That way they only got 2 mows if they are no pays. The second group is long time customers and commercials. Sent out the 15th due the 30th.
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