get used to late payers or....

Discussion in 'Lawn Mowing' started by bobbygedd, Sep 11, 2005.

  1. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Posts: 10,178

    there is a guy i know, he was at one time a one man op , old truck, 45 lawns a week. one day, out of nowhere he says, "i want to get big, really big." this was 5 years ago. now, he has 7 new trucks, 14 employees, and over 500 weekly residential accounts, as well as landscaping and commercial accts. . i met up with him yesterday, he's always at the post office, every single day, he needs to go to the post office. why? cus most of his 500 + clients, don't pay on time. he said he added late fees, it don't seem to help getting paid on time. he said he's basically accepted the fact that, if you want alot of clients, you better be able to accept the late payers. he says his overhead is so high, that it's a constant tailchase..to the post office box, to the bank, on a daily basis, just to try and keep his own bills paid on time. he said....he is screwing up his credit because he just doesn't have enough money comming in on time to pay his payroll, and bills on time. he said he tried everything, and has just learned to accept the late payers as part of running a large business. i believe there has to be some truth to this. my business is relatively small (80 something residentials) and i just drop the late payers as they come, but, if i wanted to go big, i'd have to accept this late crap. any thoughts? do you feel he's right?
     
  2. rodfather

    rodfather LawnSite Fanatic
    Posts: 9,501

    What do you consider "late" bob?
     
  3. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Posts: 10,178

    late= one day after the due date. in other words, your company should have a policy? right? if your policy is 30 days, then it's 30 days. if your policy is the 1st of the month, then it's the first of the month. in other words, any payment not recieved by the agreed payment due date, is considered late
     
  4. rodfather

    rodfather LawnSite Fanatic
    Posts: 9,501

    Well, my monthly statement has Net 15 on it. BUT, I don't actually consider it late until the 1st of the following month.
     
  5. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Posts: 10,178

    OK, THEN, you send them the end of september. they are net 15. you don't consider them late until nov 1st. correct? fine, that's your policy. do you find many comming in after nov 1st? this guy was just like, "live with it, or stay small". he may be right. i've dumped countless clients over payment issues. you can't get 300, 400, 500 clients if you keep dumping them
     
  6. rodfather

    rodfather LawnSite Fanatic
    Posts: 9,501

    I used to have quite a few after the 1st, now only a handful that I put up with...and ONLY because of the amount of $$$ they spend with my company each month.

    The problem I see Bob is that we are considered "unsecured creditors" (and we are). Other than taking someone to Small Claims Court, we don't really have any affect on someone's credit report. It sucks, but that is life IMO.
     
  7. rodfather

    rodfather LawnSite Fanatic
    Posts: 9,501

    Yes and no.
     
  8. uglytruk

    uglytruk LawnSite Member
    Posts: 28

    I'm an apt building owner, not a contractor, but, I think that the problem with deadbeats has and will always be that we're pretty much doing the same job as the neighborhood kid with a machine he (or she) found in the trash. :realmad: On a slightly different note, we're in a small city of 20k, and we have (mostly) upper end apts. (Still a small mill town), but we charge our late tenants $5 per day late fee. Our rents are in the $350 (run down) to $900 range. Some of our best tenants just don't have the money on time, so it bugs me to stick it to them. But keep in mind that the biggest credit card co's make most of their payup from late fees. It seems that our fellow 'muricans are being well conditioned. We're paying $3.25 for regular, right? :angry:
    My wife and I just re-fied a large apt complex for well into six figures, and the closing finished up after the old banks 2:30 cut-off, but at $120 per day interest, we fought to have the "fee" waived. We would have driven the cheque accross town, (10 mins.), but the attorney said he'd do it the next morning, and old bank agreed not to continue clock. We drove away in '86 Suburban (no body left) and '90 Cutlass Ciera ($125) with a cheque for half a mil in hand. payup :cool2: Bought a M50S TANK with a bit of the cash.
     
  9. twindiddy

    twindiddy LawnSite Member
    Posts: 138

    i think it's an acceptable risk for us. i would rather them consistently pay late and get the money instead of losing the money i would be getting from them.

    did i say that right?
     
  10. OMG

    OMG LawnSite Senior Member
    Posts: 275

    I love late, but steady payers.....gives me income over the winter.



    :D
     

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