Billing and collection question

Discussion in 'Starting a Lawn Care Business' started by newbomb, Aug 1, 2005.

  1. newbomb

    newbomb LawnSite Senior Member
    Posts: 391

    As a part timer I would collect from customers who were home when I did the work and collect from others every couple weeks. This was fine when I had a job and only 20 or so lawns. Now I have 70+ lawns and other projects and depend on the money as income. Now I spend too much time trying to collect.

    I am toying with once per month billing as I am sure many here do. My question is, Is it adviseable to bill in advance or at the end of a 4 week cycle. My idea is that if I can bill in advance I will eliminate dead beat customers and eliminate running around. If the check arrives on time I keep mowing. I have good references to prove my reliability. Any thoughts would be appreciated.

  2. Redneckn

    Redneckn LawnSite Senior Member
    Posts: 294

    I think it sounds like a great idea. As a mechanic, I don't know how well it will work. I do know this. When I was working for an automatic gate company, we did the once a month thing and it worked out great. the only things we did billing after the fact was for repairs. it if was maint., then most of them ended up paying before we ever came out.
    Once burnt, we didnt do anything without a huge deposit.
  3. Thirdpete

    Thirdpete LawnSite Member
    from Chicago
    Posts: 236

    I send out bills every 1st of the month, and they are due on the 30th. If all works out right, then you don't have to wait very long after the final cut for the month's payment.
  4. lawnguyland

    lawnguyland LawnSite Bronze Member
    Posts: 1,108

    I also do 70+ and bill monthly, but I bill at the end of month for work performed. This way I can add in any extra work. I also for whatever reason don't like the idea of owing people a month's worth of work- or two or three weeks even. Being solo if anything extreme were to happen or if I wanted to sell I don't owe people money or service ever. I like being able to get rid of PITAs at will (albeit nicely) and don't wwant to have to deal with refunds, or if you skip a week. It seems easier to me to bill after the fact, I like it that way. In spring I offer a small discount to pre-pay for clean-up to get cash flow flowin'. In January I'm still getting checks for the fall. I also enforce a late fee.
  5. greenwithenvylandscape

    greenwithenvylandscape LawnSite Member
    Posts: 134

    I send my bills out for the next month by the 20th and they are due on the 3rd. When I get new customers some of them wonder about that but they are all commericial accounts and they are the same way with their customers. After one month they know I'm OK. Some bills have to go to a corp. office and get held up but I know which ones they are and expect it.
  6. DaveRave07

    DaveRave07 LawnSite Member
    from NY
    Posts: 69

    I also bill once per month, just mail out the bills anywhere from 29th to 1st for the preceding month's work. In talking to customers about this many have commented that it is easy this way because it is the beginning of the month when they also get many other bills (credit cards, heating, electric, plumbing, etc.) so it makes it easy to pay their lawn bill as well.

    I do on the other hand request payment by the 15th of the following month because it brings the money in quicker and it protects from giving too much free service to the deadbeat payers. Also, 15 days is definitely enough time to pay a bill.
  7. MMLawn

    MMLawn LawnSite Gold Member
    Posts: 3,569

    Dude, listen to me on this.

    Do NOT bill in arrears like these guys do and are advising! I use to do that and then I thought hey, wait a mintue, why should I front these clients 30 days worth of cuts and the wrok involved in that and then another at least 15 days (IF they pay on time) for 45 days worth of credit, all the while still having to pay MY company bills and payroll during that time.

    So here is what i switched to 2 years ago and it has WORKED GREAT!! I bill on the 1st day of every month, due back by the 15th of that SAME month, for that MONTH's cuts. In other words I sent the Aug bills for the cuts to come in AUG on 8/1 due back by 8/15. That way (and I explain it to every new customer this way and they have no issues once I do) they are getting the first 2 cuts (twice a year it is even 3) of the month on "credit" and then they are paying for the next 2 in "advance". That way it is equal in that I "trust" them on 2 cuts and they "trust" me on two cuts. I even bill my EMPP and Commercial Clients the same way.....and I billed $30K in these accts in AUG alone.

    The only ones not included in this program and billed differently is my Government Contracts as they always require in the contract Net 30.
  8. greenwithenvylandscape

    greenwithenvylandscape LawnSite Member
    Posts: 134

    Amen! I was taught by the public not to trust them...I like your method with the trust thing They gotta understand that! I just tell my new cust. I get paid now and it works but I like the trust line! Not dealing with residential I don't have too many problems but we service a few mom&pop places and they scare me sometimes so we collect in advance...only way to go.
  9. Tn Lawn Man

    Tn Lawn Man LawnSite Senior Member
    Posts: 479

    My billing is almost exactly the same way.

    My invoices go out on the 5th and they are due by the 20th of the month.

    I very seldom have to chase money. And, it weeds out deadbeats on the front side because they don't like the whole concept.

    A friend of mine who is in the biz (residentials only, solo operation) bills at the end of the month. The month of May he was owed nearly $4000 in past due payments. That is a lot of money for a solo operation. Heck, that is a lot of money for anyone.

    I don't chase money near as much as I used to and when I do the bills are alot smaller than they used to be.

    Use this system. It is the best thing I ever did.
  10. anothertractor

    anothertractor LawnSite Member
    Posts: 61

    I too like this method froom MMlawn. Do you recommend any inexpensive software for billing? I want to get away from the handwritten invoices for next year.

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