billing before you mow

Discussion in 'Starting a Lawn Care Business' started by qltylawncare, Feb 24, 2007.

  1. qltylawncare

    qltylawncare LawnSite Member
    Posts: 1

    We have always billed monthly and it has worked well, but I want to explore other options. I have some ideas but not sure how to get it started can anyone give me some advise on how to set up a plan to get paid before I mow. In my area we get around 24 mows per year.
     
  2. HOOLIE

    HOOLIE LawnSite Gold Member
    Posts: 3,981

    Last year I switched from billing per cut and billing after month's worth of work had been done, to billing a flat monthly rate and billing upfront...this was for new customers. The old ones I just keep billing the old way.

    What I do...at the time of signup they pay for the first month then. I have two billing cycles, one on the 15th and one at the end of the month. If they signup closer to the 1st of the month I put them on the end-month cycle. If they sign up more mid-month I put them on the mid-month cycle. It seems to work well, nobody has ever questioned paying upfront. With a lot of services nowadays payment upfront is required.
     
  3. Ed Ryder

    Ed Ryder LawnSite Senior Member
    Posts: 541

    I picked up a residential property last year where the previous grass cutter forced them to pay for 10 cuts in advance. The homeowner agreed to it. The price was an incredible bargain though - just $28 per cut. The quality of the workmanship was average. (I took it over for $45 per cut, plus tax.)

    I did a survey with my customers about the pre-payment question. Even though I'm super-dooper and have a long track record with them, they were overwhelmingly uncomfortable with the idea of paying for chunks of service upfront. I think a lot of people would feel the same.
     
  4. dekalb lawn man

    dekalb lawn man LawnSite Member
    Posts: 134

    I offer 3 billing plans, monthly at regular price, season paid in full before season starts at a 10% discount, and a split pay where they pay half up front and half in july and offer a 5% discount for this.I hope this helps.
     
  5. lawn guy1350

    lawn guy1350 LawnSite Member
    Posts: 214

    Ive always concidered something like this, but wasnt real sure if alot of people did this kinda thing. I think i may go ahead and try this with new customers this year. I notice you all are up north so i wonder if this is a regional thing...I really hope not. Anyone down in my region doing this?
     
  6. echeandia

    echeandia LawnSite Bronze Member
    Posts: 1,131

    It's good to give your customers the option even if they never take it.
     
  7. StBalor

    StBalor LawnSite Senior Member
    Posts: 798

    As business owners, shouldn't we feel the same uncomfortness by supplying our service for a month before we get paid?
     
  8. daveintoledo

    daveintoledo LawnSite Silver Member
    Posts: 2,587

    but as said before, its a really tough sell... i do have a few that pay in advance for the year......but it mostly just "dont float" around here, lots of elderly farmers, factory workers retieries... they dont trust the system very much.... but by billing them monthly for services performed, most of them pay the day they get the bill.....
     
  9. lawntimenosee

    lawntimenosee LawnSite Senior Member
    Posts: 260

    We bill out the 1st of every month.. payment due end of that month.
    So customers have a choice of when they want to pay with plenty of time within the month.
    By the time end of the month arrives we have all payments and maintenance is finished.. so we are not behind, or in the hole a month or two.

    Startup of a new account is billed out at the end of 1st month's service.
    Bill has present month and next to get things in order and on schedule.. kind of like other companies.
    Like my ISP,electric, and phone company.. 1st months payment is highest, then goes to normal billing thereafter.
     
  10. ed2hess

    ed2hess LawnSite Fanatic
    Posts: 13,317

    Think of it as simply another cost of doing business.....what does $1000 oustanding for a year cost you? At 6% interest!
     

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