Cash Flow issues..How to get paid quicker.

Discussion in 'Business Operations' started by fivestarlandscapes, Sep 4, 2012.

  1. fivestarlandscapes

    fivestarlandscapes LawnSite Member
    Posts: 51

    Hi all.
    I have been in business for 3 years. Every month I look at the numbers and think Im doing well but by the time all the money comes in Ive already spent x amount on wages and fuel, fert, mulch etc. It seems like im spinning my wheels but on paper im making at least $250-$400 per day after all overhead and wages. Does anyone have a solution to cash flow issues? I bill monthly with 15 day terms. I know some companies charge credit cards per visit which I would like to do eventually. Any help would be appreciated!
     
  2. 32vld

    32vld LawnSite Gold Member
    Posts: 3,984

    You leave out whether you do commercial or residential.

    I do both. My commercial pays me monthly. Instead of giving them to the 15th of the next month do what I do.

    I give them two weeks from date of the last service. Example if the last time you did a property on 8/24 I invoice on the 24th and the payment is due 9/10. 5 days sooner then waiting to the 15th.

    Try to get paid weekly on residential. Yes some people may not be home when you service them but why wait to bill them all at the end of the month. The more money you can have flowing in partial helps being caught in a bind.

    Also make sure you have enough cash on hand to operate to cover lags in cash flow.
     
  3. Duekster

    Duekster LawnSite Fanatic
    from DFW, TX
    Posts: 7,961

    It happens from time to time to all of us. Build your reserve and limit your credit
     
  4. NB Lawncare

    NB Lawncare LawnSite Member
    Posts: 1

    Sounds like your operating to close to your limit with ar & ap. You need to look at where and when you money is spent. With a cash reserve you don't run into that problem. " my money is spent before I get it". Look to minimize your output & if you pay employee's you may want to stream line them to make them more productive. In addition. Late fees and interest are great motivators. As for credit cards look to Square.com if you have a smart phone it's easy
     
    Last edited: Sep 4, 2012
  5. seabee24

    seabee24 LawnSite Senior Member
    Posts: 619

    making it manditory for res customers to use credit cards helped a ton in alot of ways, this being one of them. we charge them every tuesday for any work the week before.

    accepting credit cards for the monthly customers has helpped speed payments as well
     
  6. calvinslawnservices

    calvinslawnservices LawnSite Senior Member
    Posts: 805

    The way I solved this issue is having some pay on the 15th and some pay on the 30th. I bill the same month of work. For the first group I send the bills out on the 1st and due back on the 15th. This group mostly consist of new accounts and accounts that have trouble paying on time. That way they only got 2 mows if they are no pays. The second group is long time customers and commercials. Sent out the 15th due the 30th.
     
  7. Snyder's Lawn Inc

    Snyder's Lawn Inc LawnSite Platinum Member
    Posts: 4,541

    You was thinking Good job
     
  8. 94gt331

    94gt331 LawnSite Bronze Member
    Male
    Posts: 1,692

    That's a simple but great idea I should try that. I struggle with cash flow everyweek.LOL
     
  9. 123hotdog

    123hotdog LawnSite Senior Member
    Posts: 481

    I use to have the same struggle. I realized the business wasn't the problem. It was me. I have streamlined my business. Of course I am only an owner operator with two part time employees. I don't make nowhere near $400 a day. However, one of the smartest things I done a couple of years back is to start purchasing a six month cd in August for enough money to cover 2x what my monthly operating cost is for the first month of the season is. This hurts in the summer but gives me piece of mind and after that first month, its gravy after that. Btw, during the summer each month I pay one utility for the year. I have all my insurance set up where it is due the end of April and the end of October. I hope some of this helps. It has changed my life.
     
  10. Duekster

    Duekster LawnSite Fanatic
    from DFW, TX
    Posts: 7,961

    Besides the 2.7 or 3% you get a $0.25 charge for each transaction.

    One dollar per client for weekly charges adds up.

    You increased cash flow over profits.
     

Share This Page