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Old 06-16-2013, 01:10 PM
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magicmike magicmike is offline
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Late payment Letter

I just started out and I have 3 accounts (one being bi weekly) and my second customer I got is now late on his payment (only by one day at this time, but still late) As a new business I need my money on time. I am wondering at how many days delinquent do you wait to send out a late payment reminder. The bill is 390 for a clean up, and a week of maintenance. The invoice was sent out on the 30th of May and due on June 15th. What should my corse of action be?
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Old 06-16-2013, 01:37 PM
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Just my 2 cents but allot of people are more used to 30 day billing cycles. We send out all our invoicing as due on receipt and normally see a thirty day return.
Give em 2 weeks past due and either call or stop by and say hi. Way to easy to ignore a letter.
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Old 06-16-2013, 02:00 PM
herler herler is offline
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The thing I look into is the total visits and the total amount they owe me, among other things these two determine somewhat the severity of the case, however I have also learned to always approach the situation delicately... Some folks are deadbeats, no doubt about it, but some simply forgot, don't make the mistakes I made.

For example...
Someone who owes me $200 for one mulch job done two weeks ago is not quite as big a deal as someone who owes me $150 for five x $30 bi-weekly mows, the two are close, I want my $200 as bad as I want the $150 but the mow customer has had far more time to send any payment at all than the mulch customer...

Generally speaking I let it go 30 days for them to make some sort of payment, but in the above example I won't let the mow customer ride another service date without pay, same goes for the mulch customer, if they call again wanting some other $200 service I kindly ask if there's a way I could get some kind of payment on the first job.

You have to know, for yourself, your tolerance limits too.

In terms of going back out and servicing a customer that has not paid again I always ask myself, can I tolerate it if these people don't pay?

I think in your case the tolerance limit might be a bit on the low side, mine isn't exactly super high either, I can't stand not getting paid but so much and so I just have to be clear in communicating this nicely to the customer, over time they learn who you are and that helps as well.

Not sure if that helps any, I kind of rambled...
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Old 06-16-2013, 02:44 PM
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grandview (2006) grandview (2006) is offline
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Don't put a due date on it. They'll figure they have till that date to pay it. Then they figure there is a 10 grace period besides.
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Old 06-16-2013, 02:55 PM
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Landrus2 Landrus2 is offline
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Hey Magic Mike. The best advice I can share with you is be more patience.
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Old 06-16-2013, 03:05 PM
Stillwater Stillwater is offline
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Old 06-17-2013, 10:33 AM
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Wayne's Lawn Service Wayne's Lawn Service is offline
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One of the biggest mistakes in our industry is waiting way too long to be paid. You did the work, get your money. The longer you wait the less it is worth.
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Old 06-17-2013, 10:47 AM
weeble67 weeble67 is offline
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Payment due upon receipt, I bill at the end of the month. If I haven't received payment I add a late fee to the new invoice and a small reminder message that payment was not received. Lets face it, life happens sometimes you overlook, or forget to send payments. All of my customers are great customers and I know I will get paid. Starting out I'm sure you will gain some shady ones. Good Luck.
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Old 06-17-2013, 10:59 AM
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grassmonkey0311 grassmonkey0311 is online now
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Originally Posted by Wayne's Lawn Service View Post
One of the biggest mistakes in our industry is waiting way too long to be paid. You did the work, get your money. The longer you wait the less it is worth.
Exactly. I used to bill at the end of the month. I got tired of waiting for money, then very frustrated showing up to new jobs asking myself if I was even going to be paid.

May I suggest billing in advance? Cell phone carriers do the same thing. I did it and have never looked back. Every mowing job I do makes it much easier knowing I've already been paid.
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Old 06-17-2013, 11:29 AM
Caddyshack Lawn Care Caddyshack Lawn Care is offline
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I look at it differently. I would never send a late-payment letter or especially add a late-payment fee unless it was a customer I was willing to lose. Because it WILL leave a bad taste in the customer's mouth. Yes, it's absolutely his fault, but I want to leave my customers with as positive an impression as possible. I bill at the end of the month, enclose a self-addressed and stamped return envelope for convenience and I get great results. It was raining here at the end of May so I was able to send invoices out on the 30th. By the following Saturday (June 8th) I had received payment from all but two customers. Just over 40 checks. The two late-paying customers still haven't paid and I'm not worried about it. They've been with me for 15 years and I know they will pay. One is a one-income household with 2 kids so I know they struggle. They're both great families and I'm confident they don't mean any harm by it and they absolutely will come through.

If someone hasn't paid by the end of the month I just add "previous balance" to the bottom. I absolutely don't use the word "late". I would only do that if I wasn't worried about offending them and didn't care if I lost the account. But over the years I've culled my lawns so that they are all VERY close to my house and they are good people who don't nit-pick the work I do.

It's an incredibly small price to help keep your customers happy.

In your case, you have three accounts and can't afford to lose them. It's only been 2 weeks. I wouldn't sweat it. It's a long time for you and you think about it every day but they probably haven't given it a lot of thought. A lot like how a utility bill sits on your desk for two weeks and to you it seems like it just came in the mail a few days ago.
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