Cash Flow issues..How to get paid quicker.

[fivestarlandscapes]

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!

[32vld]

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.

[Duekster]

It happens from time to time to all of us. Build your reserve and limit your credit

[NB Lawncare]

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

[seabee24]

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

[calvinslawnservices]

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.

[Snyder's Lawn Inc]

Originally Posted by calvinslawnservices

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.

You was thinking Good job

[94gt331]

Originally Posted by calvinslawnservices

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.

That's a simple but great idea I should try that. I struggle with cash flow everyweek.LOL

[123hotdog]

I use to have the same struggle. I realized the business wasn't the problem. It was me. I have streamlined my business. Of course I am only an owner operator with two part time employees. I don't make nowhere near $400 a day. However, one of the smartest things I done a couple of years back is to start purchasing a six month cd in August for enough money to cover 2x what my monthly operating cost is for the first month of the season is. This hurts in the summer but gives me piece of mind and after that first month, its gravy after that. Btw, during the summer each month I pay one utility for the year. I have all my insurance set up where it is due the end of April and the end of October. I hope some of this helps. It has changed my life.

[Duekster]

Originally Posted by seabee24

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.