commercial account late pays

Discussion in 'Lawn Mowing' started by tm ent., Jul 31, 2005.

  1. tm ent.

    tm ent. LawnSite Member
    Posts: 21

    How long should you let a commercial account get behind on invoices? I have one account that is constantly 30-45 days behind. When I got the account I was told all invoices would be paid in 10 days. When I call to find out about payment all I get is the runaround---we'll check into it and get back with you. I never hear back from them. I don't want to lose the account but I feel like it's getting to be too much hassle getting paid. Any suggestions would be appreciated.
     
  2. Shuter

    Shuter LawnSite Bronze Member
    Posts: 1,171

    How long have you had the account?? If it is new, I would stay on top of it. If you have serviced the account for a while, then you should be able to bank on the payment evry 30 - 45 days.

    I know when almost every account will send payment. I have some that pay right away, and others that pay 30 -35 days. But they are all the same every month. Once you get set with billing you should be able to budget every payment every month.
     
  3. TLM

    TLM LawnSite Member
    Posts: 91

    Start charging late fees - I charge $25.00 plus 1.5% of balance per month.
     
  4. Bulletproof

    Bulletproof LawnSite Member
    Posts: 156

    This really isn't a suggestion, but possibly the problem at hand for the company(s) that you are dealing with.

    We do about 50/50 commercial residential and have found that some commercial's are very prompt on payment, while others can take up to a month or more.

    We found that the lag in payment by some companies was because the company's head office (in another city) paid for the service. So we would send the bill to local office (where we cut), then they would in turn send it to head office. Then head office would take their sweet time, then send it to the local office then they would send it to us.

    So we started skipping the middle man (local office) and told head office to do the same and this has eliminated many late payments!

    Hope this helps... :)
     
  5. ed2hess

    ed2hess LawnSite Fanatic
    Posts: 13,328

    We do a lot of commericial and payments seemed to always be late by 30 days or more. One day we sat down with the accountant at one of the business and found out that our invoices were confusing. We straigntened that out with our quickbook invoices. Another problem was that the bill went to the GM for approval and sometimes never made it to the accountant. Sometimes the GM would sit on our bill to make his numbers look better for the month. We probably was at the bottom of the chain on priority so he could do that. On the other hand it won't delay the food vendors, or the electric company. Most of the companies we do business with process several hundreds of bills a month ours was just one of them. Adding on an extra charge delays things more because the GM seems a number he is not used to and then the bill sits until he can get back with you. Several account told us that the main reason that many vendors get dropped is because they don't use standand billing processes....we got the point. We contacted everone of our accounts and worked until we got it exactly like they wanted it. Over the past few months the money has been coming in a lot better.
     
  6. freddyc

    freddyc LawnSite Senior Member
    Posts: 578

    Some companies only cut checks at certain intervals. If they do payroll once a month, its likely they do all payments on the same schedule. Most larger companies spread out their payments as far as possible to cut down on accounting costs.

    One thing is for sure---the more you yell the more they notice. You should ask them about their accounting practices---despite what your contract states. I have seen controllers put off the people who they deem non-essential to the business. In short, if you sell rubber to the tire co they pay you but if you mow, they put you off.
     
  7. LwnmwrMan22

    LwnmwrMan22 LawnSite Platinum Member
    Posts: 4,372

    Do you send out invoices at the beginning? Or the end of the month?

    All my commercial work is on contract, so they pay the same each month.

    I send out my invoice at the beginning of the month, today invoices go out for August.

    This way, all through the month I'm getting checks.

    All but 2 businesses, out of 25 will be paid before the end of August, 2 will straggle in about the first week of September.

    If I were to bill out at the end of the month, then I'd be waiting 30-60 days for the work that I did at the beginning of the month.

    If you're not already doing it this way, sit down with your accounts and tell them that you're going to set them up this way, that you're not a bank and you're not going to float their money for 30-60 days.
     
  8. tm ent.

    tm ent. LawnSite Member
    Posts: 21

    I give an invoice to the store manager which is turned in the next Monday morning to the home office. The checks ar supposed to be made out then but I haven't been paid yet. This is a new account I've had for about 1 1/2 months. I've made numerous calls about getting paid and the response is I'll check into it and get back with you. I never get called back. Now when I call I get passed off to voice mail. I leave messages and still hear nothing. I'm almost to the point of just stopping service until I get paid.
     
  9. arborist-28

    arborist-28 LawnSite Member
    Posts: 246

    sometimes companies always pay late as long as you keep getting a check consistantly I wouldn't worry too much .. c
     
  10. olderthandirt

    olderthandirt LawnSite Platinum Member
    from here
    Posts: 4,900

    Skip the store manager and contact the home office or corperate headquarters. Chance are they never recieved the invoice yet or you missed the pay date cut off.
     

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