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  #1  
Old 02-12-2001, 03:37 AM
lawnman_scott lawnman_scott is offline
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Join Date: Jan 2001
Location: st pete, FL
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How do u guys deal with customers that dont pay. I have some that pay at the end of the month but try to get most to pay in advance. The only thing that has worked for me was once a customer called from work to set up service, then didnt pay so i called her house and said i guess she didnt get my bill and that i would stop by the office on friday to collect. she called that night and said never to call her again and she sent the check that nite. i am sure its illegal to go to work to collect, but the threat worked.
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  #2  
Old 02-12-2001, 10:21 AM
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Stonehenge Stonehenge is offline
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Location: Midwest
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I think you've got the right idea already -

Collect in advance. I have a different business than you do, but we try to get as much money up front before we start. That way we aren't sitting around with big bills of our own, waiting for customer ayments to come in.

As for going to her work - I don't think it's illegal. I can see how it'd be very uncomfortable for the customer. Unfortunately, occasionally you have to do things like that to get payment.
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  #3  
Old 02-12-2001, 11:47 AM
diginahole diginahole is offline
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Location: Port Perry, Ontario
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HARSH

Lawnman,
Threating customers is not IMHO a good buisness practice. Is this the first payment missed? Most companies will give you a friendly reminder that you have missed a payment. I missed a credit card payment once, the company called me 15 days later and made it feel like I was tring to rob them. The balance on the card was $2.50 and I just plain forgot to pay it. After that nasty call I cut them a cheque and cut up the card. In todays market consumers want to deal with friendly companies that truly appreciate thier business. People will tell 20 others thier bad experiences with a company before they tell just one about a good encounter. I agree that you must get paid but keeping the customer must also be first considered.

Stonehenge,
I am in the same field as you (residential installs), although I have had very few troubles with collecting at the end of the job one thing that I will be using this year is a Certificate of Completion. It will have a final inspection punch list for the customer to put in writing any items they may find unsatisfactory. Once these discrepencies have been remedied they will initial them as corrected and payment can be made happily. Quite honestly we are planning this as more of a sales tool than a collection tool but it can work both ways.
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  #4  
Old 02-12-2001, 12:05 PM
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Stonehenge Stonehenge is offline
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Digin -

I'm with you. I also have very little trouble. Last year I had only one laggard, who really never specified a reason for late payment. And I asked several times if there were problems with the install I could fix. But he's paid in full now.

However, if you've never had a difficult customer, you're really fortunate. I had one a couple years ago that we're having to take to court to get payment. The problem that time was with me. They changed the design 6x. The changed the paving pattern 2x. They changed the materials 6x. They still weren't happy with the finished product. My mistake was, I should've seen it coming and ran for the hills.

But I like the Cert of Comp idea. We have a survey that goes out with the final invoice, gives them $5 off final bill if they fill it out. If there are problems on the survey we call them to ask what needs fixing.

Do you worry that you're inviting non-payment with the Cert of Comp? I'd worry that you'll find people that you'll never make happy.
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  #5  
Old 02-12-2001, 12:42 PM
diginahole diginahole is offline
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Location: Port Perry, Ontario
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Stonehenge,
Yes, you are right about the people who can never be pleased. We get at least one every year who doesn't like the color that they chose. We try to make it clear that it is their responsibility to pick colors and styles and therefore all costs associatied with making these changes will be theirs. Written change orders for any and all changes must be signed before we change anything. Paper is worth its weight in gold as a contractor. Come colection time I want the customer to be happy to pay me. With many years of experience we have solutions to most of the problems that arise. So far so good, but if we run into something new I can sleep better knowing I have a new resoures for great solutions, Lawnsite!
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  #6  
Old 02-12-2001, 12:46 PM
diginahole diginahole is offline
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Location: Port Perry, Ontario
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Oh Ya Stonehenge I would love to take a peek at your survey to see if I can adjust the one we use.
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  #7  
Old 02-12-2001, 01:14 PM
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Stonehenge Stonehenge is offline
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Digin,

Paper and ink is certainly more valuable than anything. You can imagine how thick the file is on that customer I mentioned earlier.

I'll e-mail you a copy of the survey. Just send me an e-mail so I have something to send an attachment on.


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  #8  
Old 02-12-2001, 02:06 PM
tiffany tiffany is offline
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Location: Raleigh, NC
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We almost always charge 50% up front, and the other 50% upon completion of the work. To get the final check, our policy has been send an invoice, and a few days later call and set up a meeting with the customer to go over any questions they may have about the work that we have done, maintenance and plant care, etc....as well as picking up their check. This way, we are still trying to be helpful, make sure they are satisfied, and making sure their check didn't "get lost in the mail", all at the same time.
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  #9  
Old 02-12-2001, 02:10 PM
diginahole diginahole is offline
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We only require 10% down and collect balance as soon as the sweeping is done.
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  #10  
Old 02-12-2001, 02:34 PM
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Stonehenge Stonehenge is offline
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I used to do 50% on start date, 50% invoiced by mail at completion. But that turned into a cash flow nightmare.

Now, we do 20% to hold their place in line, 50% the day we begin, 30% when we finish. The better cash flow seems to make the night sweats go away.

I try to do a walkthrough the day we finish. Most (about 55%) pay the balance during the walkthrough, making the final invoice unneccesary.
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