Getting money back quicker

Discussion in 'Lawn Mowing' started by Craig Turf Management, Oct 24, 2001.

  1. Craig Turf Management

    Craig Turf Management LawnSite Senior Member
    Posts: 354

    I have been considering including a stamped, return envelope in my invoices each month. My theory is that if my clients don't have to go and buy a stamp, maybe they will send their payment in sooner. All of my folks pay each month, but it would be nice to have more money coming in at the front of the month, rather than the end.
    Thanks, Bill Craig
     
  2. dhicks

    dhicks Member
    Posts: 771

    I guess your proposal sounds good in theory but I prefer to say net due in 7 days on my invoices. I have only 2 customers that cannot comply with my requests. They always pay, but are slow payers.
     
  3. kutnkru

    kutnkru LawnSite Silver Member
    Posts: 2,662

    Bill

    I do as you have suggested and like dhicks has stated its not necessarily the envelope that gets to them but its the TERMS that in fact puts the fire under 'em. Of course I have heard many times while cutting how the envelopes do help because they always seem to forget to get stamps. LOL!!!

    Its a good write off too. Especially if you are able to use someone elses Pitney-Bows stamper -LOL!!!

    Kris
     
  4. grass chaser

    grass chaser LawnSite Member
    Posts: 20

    I have started enclosing the self addressed envelope in with my bills without postage and its is very effective. My customers seem to mail thier payments quicker since I have done this. I purchased a rubber stamp and a large box of envelopes from office depot instead of purchasing pre printed envelopes just for bills. I do however have pre printed envelopes I use to send proposals out to new clients and such. Just to let you know the rubber stamp only cost around $4.00. It sure saves your hands for more important things.
     
  5. JimLewis

    JimLewis LawnSite Fanatic
    Posts: 6,835

    I think puting a postage paid envelope would probably help, yes. Or at least a self addressed envelope. Think of how you get most of your monthly service bills. They include a self addressed envelope but no stamp. This saves you time. Still, I don't think it's gonna make an overwhelming difference to do either of these. But it will probably help a few people pay sooner.

    What you (and every other LCO here) should really consider is setting your clients up on Automatic Payment. We began such a program about 2 years ago and it has worked wonders for our monthly receivables. Now, I have 78 clients (over half) set up on this program. And I get money deposited in my bank, on time, every single month from each of these people.

    Simultaneously I adopted a zero tolerance policy on late payers. I contacted those who were chronic late payers and told them [very politely] they'd either have to sign up for AutoPay or we'd terminate service.

    I also began offering two prices for every bid I gave. The first price ($115 / month, for instance) is the rate for they get if they sign up for AutoPay. The second price (always at least $15 more, $130 in this example) is the rate they pay if they prefer to be invoiced. Now, 95% of new clients choose AutoPay.

    Automatic Payments are very common thing these days. Most health clubs make it mandatory. Banks offer a discount on your mortgage rate if you sign up for AutoPay, etc.... People (especially rich people) are used to it. Everyone seems to be fine with it (to my surprise because personally, I HATE things coming out of my checking account automatically.)

    If you want more specifics on how this kind of program works and how much it costs just email me. I'll tell ya, I never worry about receivables anymore. It's wonderful!
     
  6. Craig Turf Management

    Craig Turf Management LawnSite Senior Member
    Posts: 354

    Thanks for the quick responses. My terms are net 15 days for all of my contract clients, and due upon receipt for everyone else. But some folks just don't get the money in in 15 days for whatever reason, and I'm not going to drop my regular or hassle them if my payment is a little late. It would be nice to get the money into my office (corner of my den), alittle sooner, and by including a preaddressed and pre-stamped envelope it would be a convenience to my clients as well as a subliminal message to pay their bill.
    As far as addressing envelopes go, I use Quickbooks Pro. I buy the little two window envelopes, and the computer spits out the invoices tha once folded have the address of the client in the large window, and my return address in the other.
    Once again, thanks. Bill Craig
     
  7. LoneStarLawn

    LoneStarLawn LawnSite Bronze Member
    Posts: 1,415

    We send out invoices that have our address on the remittance slip so they can just slip it in the stamped return window envelope with no problem.

    We have been using stamped return envelopes since the beginning and I can tell you a few of things that I have learned.

    1. The people who always pay on time will pay sooner and will see the stamped envelope as a "perk". It helps when they give out referrals.

    2. One time late payers will not be late again.

    3. Usually late payers and always-late payers will become "LATE PAYERS". They see that enveloped stamped as "Oh I have a stamp already so I can just send it out tomorrow". They are procrastinators and will always be.
     
  8. JimLewis

    JimLewis LawnSite Fanatic
    Posts: 6,835

    I agree with LoneStar about late payers. There's no way to change them. If you feel like puting up with them and can afford to, fine. Most LCOs just put up with them.

    Personally, I don't like loaning money to my customers (which is really what it is if they are holding on to your money past the time it is due). Furthermore, as you get a bigger business, these late-payers add up. When I finally reached my wits end I was averaging $4000 + in late payments each month. Do you know how much that sucks?!? Some clients would be up to 3 months late. Sure, they'd always appologize but I was the one who had to pay all of my employees and bills in the mean time. What began as a small problem had turned into a large problem once we began to get bigger. Hence, I took action as described above. And it's been great. We get about 90% of our payments by the due date now. And 99% by 5 days after. It's pretty nice.
     
  9. Craig Turf Management

    Craig Turf Management LawnSite Senior Member
    Posts: 354

    Thanks to you for all of your help.When I invoice next week, I'm going to include the pre-stamped return envelope. Hope it helps things a bit.
    Have a great day:blob4:
     
  10. KerryB

    KerryB LawnSite Senior Member
    Posts: 661

    Hope the envelopes help and dont just become an added expense for nothing.
    I agree that most leopards will not change their spots. They just find another reason to put it off. The best thing I think (mtc) is a due by date and a late fee if not paid on time. Most people do like to save money. Maybe the ppe and the deadline with late fee will help to remind them to pay.
    I guess I am lucky that all my accounts pay on time, but most of mine are commercial props. My res cust. pay when service is rendered, and that was their idea not mine but i am not kicking that horse in the mouth.
     

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