Fee for Billing, will it work?

Discussion in 'Business Operations' started by kdbetters, Jan 20, 2005.

  1. kdbetters

    kdbetters LawnSite Member
    Posts: 70

    I did a strenous search and could not find exactly what I was looking for so I just have to post this.

    This up coming season I really want to push credit/debit card billing for my customers instead of monthly billing. The ones I have on monthly billing I will keep, however New Customers I will charge a 10% billing fee and a $25 late fee. I am doing this in hopes to discourage customer not to do billing. I am not going to even mention the billing option to them, but if they ask I will let them know that we can but those are the guidelines. I just don't want to lose any customers because I don't want to bill. So in essence I can say that I have payment options, but they will not want the billing, but if they do then I can benefit because I will recieve extra revenue for the convenience and the hassle of billing.

    What do you guys think?
    Would you do it or not?
     
  2. marko

    marko LawnSite Senior Member
    Posts: 963

    I will be trying this (credit card only) this year. As its my first year w/ no customers, I might have to accept checks and will for a good account. I however and going to attempt to thrive on volume and next year will not give them an option (other than prepay for the year cash!)
     
  3. dforbes

    dforbes LawnSite Member
    Posts: 195

    Good luck, I hope it works but to be honest if I were your customer and you told me this I would be looking at other companys. You would just p*#$ me off.
     
  4. cklands

    cklands LawnSite Senior Member
    from MA
    Posts: 360

    I think that you will probably offend a lot of customers that have been with you for a while that pay on time. I would try it with new accounts first before you push the issue with accounts that you have had for a long time. See ehat kind of reaction you get from the new accounts. Good Luck.
     
  5. Fantasy Lawns

    Fantasy Lawns LawnSite Bronze Member
    Posts: 1,913

    I have found that wording is key

    I offer a discount fore payments recieved by the 20th ..... we bill monthly down here n say i have an account I need $100 monthly fore ..... I bid it it at $115 but offer a discount to $100 when payment recieved by or before the due date
     
  6. kdbetters

    kdbetters LawnSite Member
    Posts: 70

    Actually it says in my original in the post that this will not affect my current customers only the new ones. Basically I want all the new customers to go only with credit cards. Many companes implement this sytem and are very successful. However I am not in a position right now to turn down business.
     
  7. Tvov

    Tvov LawnSite Bronze Member
    from CT
    Posts: 1,157

    Is using a credit card for paying for landscaping/lawn service common in your area? It is not very common around me, especially for mowing services. If I restricted customers to it, I think I would lose most of my regular maintenance customers.

    Have you talked to the credit card companies about setting things up? Or are you already set up for that?
     
  8. kdbetters

    kdbetters LawnSite Member
    Posts: 70

    I am already set up to accept them, however, there is no standard you know that. Some companies except them but it is optional, some companies do not accept them, some make people prepay, some do billing, its all different around here. However I am about 45 minutes away from JustMowing, and I have personally talked with him, bought some of his equipment and seen his set up. I really like his set up. We target the same type customers, residentails under 12000 sq ft. He now requires all new customers to pay with credit/debit cards. However it took him more than one or two years to come to that point. Like I said I can do billing, I just want to discourage it.
     
  9. dforbes

    dforbes LawnSite Member
    Posts: 195

    after reading fantasy lawns post I think he is saying tell the customer (just an example) the cost for your lawn is $35.00. However if you pay with a credit card it will only be $30.00. Put in your own numbers. I think this aproach may work. people are always looking for a bargin. This is totaly differant than your post, and I would seriosly consider this option. sorry my pop up blocker blocked spell check again. tying to work it out
     
  10. HOOLIE

    HOOLIE LawnSite Gold Member
    Posts: 3,981

    Fantasy has great advice. You want to offer the customer an incentive, something positive, rather than putting a negative spin on it. I remember my first apartment, $705 a month, OR, $695 if I paid 3 days early. I'm sure they just jacked up the price 10 bucks, but so what, I was down at the rental office 3 days early each time. Now think, if they had said $695 a month, but $705 if 3 days late, I'd have paid 2 days late every time. And would have had a lesser opinion of them.
     

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