How do you prefer collecting your payments?

Discussion in 'Business Operations' started by yazzy, Nov 18, 2012.

  1. Duekster

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

    I just picked up a client, she has generated about 600.00 worth of work the last two months.

    Her complaint with the last company. She would forget it was mow day and not leave a check so they would not mow. Lady has a very nice house, I say about 300K. She and her husband are your typical working middle class family. They are too busy to mow, lead active lives and are on the go.

    I can not tell you how many times a prospect looks relieved when you say, I will bill you. give me your e-mail. You can print it and mail me a check, or pay on-line. I think ask the clients to use the IPN program.

    I typically bill at the end of the month set up the terms to 15 days net.
    Commercial, I bill mid-way through the service cycle but offer 30 days. IE I bill commercial on 15th of the month for that months service but offer 30 days net.

    More and more commercial clients are going to ACH payment transfers. Some get me the check 15 days after service.

    You will learn pretty quick how to tell a good client from a dead beat
     
    Last edited: Nov 22, 2012
  2. TuffWork

    TuffWork LawnSite Senior Member
    Posts: 507

    To avoid these issues I don't bill at the end of the month. I bill at the beginning of the month and tell customers they are not expected to pay ahead of time, but they are expected to pay by the end of the month. That way money is coming in throughout the month as we are doing the work. Some customers pay at the beginning, some pay at the end. If payment is not made by the end of the month service is discontinued until they are paid current. However, you are right that it's hard to keep track of credits, etc.

    The trick to that is to put the ball in the customers court. Tell them to call if they don't want us to mow. Otherwise we mow everything, and we always make up rain days. We sharpen our blades every morning so if it's a little damp it doesn't matter. We use quickbooks for our invoicing so if they want to change their frequency for the month they can as long as they call before they pay and we can just adjust their invoice on the computer.

    For guys that are solo this could be hard. It's alot of paperwork. When I was solo I just had people pay me as they went and just kept track of who owed me. Luckily now I have a secretary for all that (my wife).
     
  3. Agape

    Agape LawnSite Bronze Member
    Posts: 1,645

    I always say this and I always get jumped on.
    For me, I hate billing and cashflow problems so I set everyone up on autopay.
    My computer runs it automatically on certain days so I can expect it.

    I sell it as such that: if I want, say, $200/month for a service... I write the quote as "ultimate package- $200/Mo. with our autopay package, or $220/mo. if you prefer to be invoiced monthly."
    I only have 2 people who I invoice, and it's ok, cause I get an extra $40 for doing 2 invoices per month.

    It costs money to do credit cards, but not as much as Gas to run across town to pick up a late check because your bills are late and you had to corner your customer.
     
  4. jsslawncare

    jsslawncare LawnSite Bronze Member
    Posts: 1,674

    Cash, when I'm done.
     
  5. Darryl G

    Darryl G LawnSite Fanatic
    Posts: 8,139

    So you knock on the door or what? A lot of my customers aren't home when I service their lawns and a good number of them are only there seasonally. I don't even want cash...rather have a check. That way I have a check number on my books and the customer has a cancelled check, or at least an electronic image of it in case there are any disputes. And putting cash in my pocket...well, I'll likely spend it before I get to deposit it, lol.
     
  6. jsslawncare

    jsslawncare LawnSite Bronze Member
    Posts: 1,674

    I have NEVER had a problem with this method. I come on the same day, time frame for every customer, every visit. I do get checks, but my payment is under the front door mat waiting on me. If they forget, I call and remind them and they double up on the next visit(no special trips are made for collecting). No contracts. No "low monthly" payments. I work, you pay and I manage my money for the year with a 2 1/2 month vacation. It works for me.
     
  7. Darryl G

    Darryl G LawnSite Fanatic
    Posts: 8,139

    Ok, if it works for you...I used to do that too, when I was 12 years old ;)
     
  8. C Jovingo Landscaping

    C Jovingo Landscaping LawnSite Senior Member
    Posts: 436

    JSS I do the same as you. Most of my clients pay while I'm there. I don't go chasing payment. They bring it out to me while I'm working or leave it at pre determined location. I offer monthly but these clients prefer paying each visit. I have 2 that get bi weekly bill cuz of their payday & 3 monthly. I work with the client & let them choose what method they want. New clients are not offered monthly until I get to know them & feel they will be prompt payee.

    I'm only part time with 15 clients & this has worked for 3 seasons. Gonna give full time a shot next season & may move to strictly monthly once the client base gets built up. Kinda leary though cuz in 3 seasons thee only time I got burnt on payment was first season, a woman that called wanting service after her & husband seperated & she moved back in house 6wks later after he moved out. I never met her face to face, gave her price over phone. 3 mowings for the month & left bill on door on last visit of the month. I mowed her the first week of following month & when I had not received payment in 15 days (term stated on bill), I tried contacting her. She would not answer phone or reply to my voicemails. $30 lawn so got burnt on $120/ 4 visits. That's when I decided to only offer billing after I got to know the client!
    Posted via Mobile Device
     
  9. McFarland_Lawn_Care

    McFarland_Lawn_Care LawnSite Bronze Member
    Posts: 1,412

    Okay, I must just be "lucky" or have a good sense of a customer but I always have billed monthly and only burned once or twice and mostly that was because the customer fell on hard times and just could not make ends meet. You guys that collect each week just keep in mind that if you ever want to grow larger and have employees out on their own, you'll surely not want them picking up your payments every time - just thinking ahead. If you want to stay small scale than it probably works well. A majority of our clients done even live in their houses up here year around - mostly vacation homes, so that would never in this area.
     
  10. C Jovingo Landscaping

    C Jovingo Landscaping LawnSite Senior Member
    Posts: 436

    Agree 100%! Of course it won't work in vacation home area. I stated in the past in another thread, that weekly payments will only work with owner/operators. Crews could not & should not be responsible for handling payments. It has worked for my situation being solo part time, when I go full time & client base gets built up, I can weed out the weekly payees as they are the least desirable accts. My weekly payees are mow only with barely any other work wanted. I want to be strictly full maintenance when I go full time, so will drop less desirable accts as I grow.
    Posted via Mobile Device
     

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