and another deadbeat customer

Discussion in 'Lawn Mowing' started by Ramairfreak98ss, Dec 13, 2007.

  1. Ramairfreak98ss

    Ramairfreak98ss LawnSite Silver Member
    Posts: 2,210

    This time of year when were wrapping up accounts and all, you run into the ones who just decide to "not pay".

    I have a customer that started a $40 lawn account in the spring, for 23 cuts starting in May 07. I sent him a contract or the breakdown of 23 cuts x $40.00 per lawn cut weekly for three equal payments of $328.14 including 7% sales tax due at the start of cutting, July 1st and August 15th 2007.

    Keep in mind the cuts started in May, His first payment left for me with his contract was for $240.00 on June 20th 2007 on his doorstep.

    So he was already late, never charged him any late fees as disclosed in contracts, billing etc.

    Next payment due July 1st, i get dated July 20th 2007 for $280.00
    Lst payment i finally get after sending numerous invoices, emails etc for $400.00. Now the first check was only 19 away from the last one, which usually means they write very few checks at least from said account.

    All total, i got $920.00. Once they sent the last check in almost December, for the August payment of $400, i realize it looks like he thinks he does not have to pay the sales tax in new jersey. I send him a LONG email with his entire yearly breakdown of his charges in plain English.

    He responds to the check of $400 instead of $474.40 as being paid in full. Then he states i never made any mention of sales tax to him :nono:

    I told him to review his first paragraph, thats all but 4 sentences with his contract breakdown that he signed at the beginning of the season.

    He tells me to send him a copy of this "signed" contract. Ive sent this ahole so many things already im just going to take it to small claims already. Then he emails me again to send him a copy, so today i look through my paperwork contracts on file, and guess what, my own oversight, this ahole left me a check with his contract and never signed the darn thing :confused:

    This isnt the first time customers havnt signed things that i've requested, i frequently get bills returned to me with payment and not signed or dated, but theyve sent payment.

    How will this hold up in court, knowing i have a contract from May 22nd 2007, three payments for $920.00 total which is what the contract total was plus tax and emails from him stating that he doesnt think he has to pay sales tax? The discrepency isn't that he never had a "signed" contract, it is the fact he never paid the tax on the sale in NJ of 7%. Has anyone had a judge "not" side with them for collecting the sales tax on this amount? I've still paid 7% sales taxes already on the $920 out of my own pocket.

    Just for kicks, seperate from this situation, the customer in october, inquired about my fertilization and aeration services. I give him a price and add him to my "to do" list of properties. Again, he never signed anything for this service because his email was last minute. In November, after my 3rd LATE bill to him, he states he never "asked" for this, only inquired about the cost and did not want it done. His bill for this was $128.xx. Because he was right, i canceled this bill, and lost money on the aeration labor and fertilization of a half acre lot. I had bundled his final payment of $328.14 and $128.xx for his original contract amount and aeration in one bill. Of course, up until this point, i have not noted on his account for future billing that he was behind in payments. He had to forward me $456 as his total for everything on that bill.

    After i had to "investigate" all charges for him to break down everything, i realised that he had only paid $240 and $280 towards bills of $328.14 each.

    Even after removing the $128 charge for aeration, he still owed a total of $474.40, which was more than if he didnt open his stupid mouth to begin with and try to cheat my company out of services i damn know he wanted but have no proof of. He realized i cought on to his underpayments and then realized he just cost himself more money than if he just paid the bill in full, and now he doesn't want to pay sales tax:hammerhead:
  2. Scagguy

    Scagguy LawnSite Bronze Member
    Posts: 1,522

    I've learned the hard way that when the first payment isn't sent to me on time and or is short, it's time to part company right then and there. I don't have a clue how small claims court would rule in your area. One of the things I'll be doing different next year is all new customers will prepay and we will have a cc on file and debit their card on the 10th of the month. Sure, that policy may cost me a few customers. The way I see it, by doing so will weed out the deadbeats and allow me more time to focus on the business.
  3. fastcat

    fastcat LawnSite Senior Member
    Posts: 799

    if he never signed anything there isnt a whole lot you can do but keep bugging him for payment.
  4. humble1

    humble1 LawnSite Silver Member
    from MA
    Posts: 2,499

    I would have to say that although he didnt sign the contract it was ikmplied that he agreed to it by paying you for the services according to the contract he didnt sign. You learned a lesson that no buisness school could teach you. I rule by the contract even had my own cousin sign one for a 9000.00 job. NO contract no work period. No deposit no work.
  5. fastcat

    fastcat LawnSite Senior Member
    Posts: 799

    when a customer signs my contract there first payment is due at signing and every month on a set date and if i dont get my payment 15 days after due date i dont do anymore work until there caught up on payment.
  6. lawnman_scott

    lawnman_scott LawnSite Fanatic
    Posts: 7,547

    I would immagine with the checks you collected you would win in court, if its even worth it. Go to a store and ask how much something is. Do they include sales tax?
  7. chumiller22

    chumiller22 LawnSite Member
    Posts: 9

    Wow I’m seeing a new business opportunity open up with all these late paying/non-paying customers. I have never had any trouble collecting money in the past…being six foot seven and 335lbs and Italian has its advantages I guess. If some of you guys want to hire me on the side….( j/k lolol) let me know.
  8. dwc

    dwc LawnSite Senior Member
    Posts: 626

    some of you need to stick to your guns and bug these people until they are sick of you and get your money! That is the whole problem with our industry, people think its just "lawn mowing" and they think we are not capable of making their life miserable. They also know we do not have any vital services to cut off like the electric company does. Don't just back down and beg them for the money, DEMAND it. You earned it!

    The best thing to do is to have a plan in place for late payers. You need due dates on the invoices, along with late fees that are tacked on after that date and stick to it! You can be a couple days lenient but after that nail them with the late fee and send a 2nd invoice. A friendly reminder letter/note with the invoice helps also. Get a red PAST DUE stamp from an office store and stamp the invoice with that also. Something about that red ink makes them think harder. After the 2nd invoice goes unpaid for XX number of days, send them a 3rd invoice along with a demanding letter informing them of the consequenses if they do not pay in XX number of days. Whether court, collections, filing on their credit, sending chumiller22 (j/k) or whatever you decide to go with, follow thru after that number of days passes. Usually it is much cheaper and more effective to go with a collection agency than the court process.

    If it comes down to it turn them over to somewhere like old debts that will send them letters then put it on their credit report. This usually will wake up most people in a big hurry!

    As for the guy with the sales tax issue, I would send him a letter or email or whatever informing him he would be turned over to the appropriate authorities for his tax evasion. That is not your charges and you should be able to let the state handle him on that. When he goes to Wal-Mart, they do not include tax in the price listed on the shelf, it is added in after the total is figured.
  9. Patriot Services

    Patriot Services LawnSite Fanatic
    Posts: 12,973

    You might stand a good chance in court. Signature or not you are able to present a " pattern of proof". Meaning he has already paid several times in amounts that correlate to the contract. He will have to demonstrate that you somehow did not perform the work. If he goes in with the defense of " I'm not paying sales tax" the judge is going to eat him alive and possibly refer him to the state for an audit to see what other tax he doesn't like to pay. I would take it to small claims. It is a civil matter so you only have to prove reasonable doubt.:usflag::usflag::usflag:
  10. wooley99

    wooley99 LawnSite Senior Member
    Posts: 269

    Since I was doing customer Christmas cards today along with late notices I combined the two for two of my deadbeat customers. I put their past due invoice and demand letter in the card. Since the one won't receive my certified letters and the other is no longer returning my calls I thought they might open a Christmas card. It won't do any good for the bottom line but it warmed me to the bottom of my heart.:angel:

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