thinking about switching over to pre-payment only

[MJStrain]

Originally posted by bobbygedd
this is how we do it. full serve customers, these r the customers thar recieve spring and fall cleanups, fert programs, weekly mowing. add up total cost of season, divide by 10. so, if their package costs $2000 , we get 10 payments of $200 each. the first one is due no later than march 1st. pros: since we dont start till about march 25th, we have one payment in our pocket, another is due april 1st. so, we are 2 payments up on them. why? helps with startup, and u will never, ever get boned out of money. FOR fert customers only, payment in full before any work is done. WHY? i am not dealing with the **** that comes with fert programs, they dont water, they blame u for crappy looking grass, and dont want to pay the bill. PROS: u will never get boned out of money. for mowing only clients, the bill for the whole month is due by the 15 th of said month. EXAMPLE: we start april 1st, we cut the 1st, the 8th, and on the 15th, get paid for 1st, 8th, 15, 22nd, 29th. PROS: eliminates having to wait several weeks to get paid, helps with cash flow, and, u can never get boned out of too much money. anything else(trimming, planting, etc) is due upon completion of project, if materials are needed, we get about half up front. only one person gave us a hard time with the full serve pkg. they thought it was unfair to have to pay anything in advance, i said call someone else. on may 18th, they finnaly gave in and said they wanted us, i made them pay back payments that were due on march 1st, april 1st, and may first. then we started service.

You actually made them pay for March, April and May? You weren't even there!? Your tough dude. REALLY tough.

[CLM1103]

I quote customers based on 12 months of billing. I bill at the last day of month and usually have all payments in by the 15th. I have a few customers that voluntarily pay a year in advance for mowing. My price is not based on any certain number of mowings, but rather "cut when needed". This works good for me as I have same income year around. I am in a retirement area where most of my customers return to Canada or northern states during summer months and only spend Nov. to March here.:blob4:

[marley]

Do you have a couple of months in the winter where you do not go to the accounts? That is what I face here in wash. Are new customers pretty receptive to the 12 month 12 installment payment plan or is it a hard sell?

[JimLewis]

I totally understand your frustrations. And there is a great solution to your problems. About 3 years or so ago we were having major problems with late payers, accounts receivable, etc. We were having like 30-40% of our money come in after the due date each month. It makes it almost impossible to pay your own employees and your own bills on time. I was frustrated to no end.

Anyway, I came up with a solution that has totally solved our problems. I finally created a web page about it because I had so many people asking about it.

For more information, go here;
http://www.cybcon.com/~jimlewis/AutoPay.html

[bobbygedd]

i made them pay fir the months that i wasnt there, because: they were pita customers the year before, they nickle and dimed me, and they were always late. i sent out the contracts jan. 10th, they didnt think enough of me to call or ask questions or anything, they just waited, and decided when they were ready to have me, they would call. it is very important to me to stand my ground with customers, they must understand that i am a contractor, im not their employee. i always treat them with due respect, and i expect the same. lawn guys get mistreated because there r too many who dont stand thier ground, they bring down thier prices, and they allow customers to push them around. i have heard a million times from customers how, "my last guy didnt charge extra to trim bushes, my last guy used to clean the leaves and sycamore bark in the street every week, and never charged me extra.......".

[marley]

I never even considered that method of payment. I guess I just assumed it was for banks and insurance companys. Thanks for your reply and that link to the web page you wrote. I was down in Florence over labor day weekend and I saw the sighn for Tigard on I-5 and thought of your company. Right now I am recooperating from an injury that happened while I was down there. It is almost a blessing in disguise because I have plenty of time to think about what things I would like to change about my company. One more quick question for you. For your customers that have the same amount taken from thier account every month, do they make 12 monthly payments or 9-10 payments(spring / summer / fall). I will probably bug you with more questions as I am still getting all my ducks in a row for this payment system overhaul I am about to do to my co. Any way Jim, thanks again.

[JimLewis]

All of our accounts are year-round. They pay a flat fee all 12 months. Service goes down to every two weeks during the winter. And even then, we don't do nearly as much work as we do during the spring, summer and fall. But my prices take that into account. People seem to understand the year-round nature of our business.

But the AutoPay thing could work either way.

[brucec32]

I'm amazed at how many operators can get people to pay 12 months a year. Especially in areas where there may be snow on the ground and certainly nothing growing much. I would assume that you'd have lots of grumpy customers in the winter when they're cutting you a check for basically blowing off their drives and maybe doing some cleanup work. I guess there is always something to be done though.

I charge per-mow during the season and per-hour for extra work like shrubs, pruning limbs, mulching, etc in the offseason. I may make a little less in the long run,but I enjoy the time off and want to avoid the hassles of arguing with people about what I did during the winter. A guy I worked for had high turnover mostly because of conflicts about if he was earning his pay or not.

[bubble boy]

we are on monthly contracts, billed at the end of the month. about a quarter of our customers opt to give us six post dated chq's. payment on time, save on stuffing envelopes, stamps, etc. works great, and they know they can always stop payment if there is a prob.

extras billed as performed. weed and feed up front, for bobbygedd's reasons. snowplowing up front, because we charge flat rate for season.

[Katwalk]

We don't actually offer pre-pay or monthly installment plan. Something we did change this year was to split the customer list down the middle and bill half the 15th and half the 30th. This has created a more consistent cash flow. About late payers....feel free to call these people and clarify the terms....you can be firm and friendly at the same time...they need to be reminded sometimes that payment is due upon receipt...the work has already been done.