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Bill Or Pre-paid

Discussion in 'Starting a Lawn Care Business' started by grasscutterman, Mar 12, 2007.

  1. grasscutterman

    grasscutterman LawnSite Member
    Posts: 19

    My wife and I run a small "grass cutting" business. We do not have any commercial clients and we do not do any hard-scape. We have been in business for 4 years and when we were small collecting money was easy. Last season our client list literally tripled, and we billed monthly. My wife would send the bill at the end of the month with a due date i.e. the 10th. The problem was by the time people paid late, and the checks bounced, they were already another 2 cuts in the hole to us. We spent alot of time chasing our money while we were trying to pay our bills and the help. Many times my wife would have to upfront payroll with her income. After talking to a few local guys who do not bill monthly, my wife refuses to bill monthly, and thinks that anyone who doesn't want to leave the payment on the door should pre-paid. I think we will lose clients, but she thinks it will weed out those who plan to stiff us in the end. My question is what does everyone else do? Bill, pre-pay, collect on site? For jobs like spring clean ups or mulch do you charge a portion to cover the cost of buying supplies etc?
  2. milsaps118

    milsaps118 LawnSite Senior Member
    Posts: 559

    I prebill all my accounts comm'l and res. If I don't get payment by the 1st of the month, I don't show up. Simple as that, with some exceptions depending on the customer. Get your $ up front, back up your service by showing up every time and you'll start to earn the trust of your customers and they won't ever have a problem with you billing them in advance.
    Good luck!
  3. AlleganyLawnCare

    AlleganyLawnCare LawnSite Member
    Posts: 180

    For my residential clients I do both, collect at the door and bill monthly (I give them the option). For my commercial accounts, they are all billed at the end of the month. All of my large box-retailer clients specifically state in their contracts when they are to be billed. You don't have too much say-so when it comes to them. I have had only one person (residential) where they had to pay a late fee. I have to say, my clients are very good about paying without any fuss. I wish everybody's clients were the same.
  4. Allens LawnCare

    Allens LawnCare LawnSite Senior Member
    Posts: 926

    I give out the prepay option and give a free cut to be applied to the last cut of the season, buy then the grass really isn't growing so the mowing and trimming is light and they think there getting a deal...works out well for me!!
  5. topsites

    topsites LawnSite Fanatic
    Posts: 21,653

    I may suggest defining a clear-cut payment procedure that you follow, so it can become routine and in time, easier and more efficient. Because what I see appears typical of a case involving customer number increases, it simply appears your old method is no longer efficient or effective.

    So work it out to a defined system, this is how you do things and so it becomes a part of your routine which makes it easier to deal with, and no exceptions.

    GELAWNS LawnSite Member
    Posts: 66

    We have most of our customers set up for billing on either the 1st or the 15th of the month with terms of 15-16 days. For example: If we take on a new client today (3/12), we will send a bill out 3/15 for partial month of March and the month of April, all due on April 1st. An account set up after the 15th of the month, will be billed on the 1st and due on the 15th. It works for us to have two days for billing and collections a month. If customers that were due on the 1st of the month haven't paid by the next time we bill on the 15th, we give them a call or send them a late fee notice. It depends on their past history with us.
  7. lawnpro724

    lawnpro724 LawnSite Silver Member
    Posts: 2,201

    I bill everyone monthly and never have much of a problem getting paid. Certain people take a little longer than I would like but nothing is ever over 30 days usually I get paid 10-15 day from date of invoice. In the past customers who paid late over 30 days got a warning letting them know if they were late again sevice would be pay as you go.
  8. Leisure Time Lawn Care

    Leisure Time Lawn Care LawnSite Member
    Posts: 145

    I offer pre-pay and billed monthly. I offer a 20% discount for season prepay. I figure this way it will make it sound better to the customer offering a discount and it saves me from chasing my money doing pre-pay (gas and Time)
  9. Woody82986

    Woody82986 LawnSite Silver Member
    from DFW, TX
    Posts: 2,128

    I just kind of realized this. I pay my cable bill for the upcoming month. Not the month of cable I just received. Sure, you pay for your cell phone usage and electricity after the fact because they don't know exactly how much you are going to use, but other services you have to pay for before you receive them. I guess I don't see lawn care any differently. They are paying for a service that will be rendered during the month and is not based on usage. I guess pre-billing for the upcoming month isn't a bad idea.
  10. jeffscap

    jeffscap LawnSite Member
    Posts: 155

    In pa ,We send contracts out in early Feb,with a 6 mow prepay,then bill on a monthly basis,due in ten days.We do not collect on site(to many hands in the till) On material jobs(mulch)(any hard scape) a deposit of 50% is required balance upon completion.The people that do not pay do not receive service until bill is paid in full.

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