** How To Always Get Paid On Time **

Discussion in 'Lawn Mowing' started by JimLewis, Nov 16, 2002.

  1. JimLewis

    JimLewis LawnSite Fanatic
    Posts: 6,842

  2. Nebraska

    Nebraska LawnSite Senior Member
    Posts: 525

    Jim,

    How much of a reduction did implementing auto pay have on bad debt %ages.
     
  3. JimLewis

    JimLewis LawnSite Fanatic
    Posts: 6,842

    Nearly 100%. As I stated on that page; when we first implimented AutoPay I told all of our chronic late-payers that they either had to start on AutoPay or we wouldn't service them anymore (there is a very polite way to say this.) So those people were either eliminated or converted to AutoPay. Either way, we didn't have any more late payments from current clients.

    And 95% of the new clients chose AutoPay too so that eliminates most of the other potential late payments. Of the 5% who don't chose AutoPay, I just have to watch their payment history more carefully. But I am getting paid 10% more so I don't mind.

    Now, When the end of the month arrives and payments are due, I usually have 95-100% of the money collected for that month.
     
  4. crazygator

    crazygator LawnSite Bronze Member
    Posts: 1,048

    Jim,

    Thanks for the tip. This is a great idea.

    I did think you might post, to get paid on time get a real job......LOL! ;)
     
  5. bilbo7021

    bilbo7021 LawnSite Member
    Posts: 99

    I too thought you'd say something like....."how to get paid on time, get a regular paycheck" :D

    This would be great for me if I can get people on it, then I wouldn't have to ask them to "leave the check" someplace and risk it not being there. I'm thinking of trying to get this set up in time for next year, then whenever I get a new customer they (hopefully) will automatically get on the system and I know the money is coming.

    But I do have one question though. What happens if they don't get the money in their account in time, and the Autopay is refused?
     
  6. Nebraska

    Nebraska LawnSite Senior Member
    Posts: 525

    How does this system work for commercial accounts.....That's the area where we have large amounts that hold out up to 60 Days or longer.
     
  7. JimLewis

    JimLewis LawnSite Fanatic
    Posts: 6,842

    Well, first of all, that rarely happens. At least with our clients. I get one draft returned to us maybe every 6 months. That's out of about 100 per month. But the way the autopay is set up with us is they actually debit the clients' account with automatically created, pre-authorized checks. So if one gets returned, I just re-deposit it and usually then it's fine.
    I don't really have a good answer for that. We don't do commercial. But in theory, you could do AutoPay with anyone as long as they have a checking account. Although it may be a tougher sale on commercial accounts because of their accounting.

    We do a few home-commercial acccounts. That is, a business ran out of a house. There's one with like 20 employees that show up to this house every day. But it's still basically residential. Anyway, they are set up on AutoPay with their company checking account. So I know it can work.
     
  8. JimLewis

    JimLewis LawnSite Fanatic
    Posts: 6,842

    I should probably add that the reason this rarely happens is because clients have to choose a day of the month when they want the funds to come out of their account. And most people choose payday or right after payday. I get a LOT of autopays on the 15th, 20th, 30th, and 1st.
     
  9. Nebraska

    Nebraska LawnSite Senior Member
    Posts: 525

    Do you still send out statements showing the monthly activity at their property as well as for documentation for payment history? If not did anyone request this?

    What's been your experience with add-ons like leaf cleanup;) , aeration, pruning etc..
     
  10. JimLewis

    JimLewis LawnSite Fanatic
    Posts: 6,842

    When a person signs up for AutoPay, I write a letter explaining how AutoPay works and that they won't be receiving an invoice each month unless they specifically request it. A few have requested that I send them invoices. But most don't care.
    I talk about this on that web page I referrenced above. When we do a side-job for a client (like pruning, etc.) then when we are done, I just call and ask, "....should we meet at your house so I can get a check or would you prefer I just take it out of your checking account with AutoPay," Probably 70% of the time, they just choose AutoPay and so I send a quick email to the lady who handles that for us and within 2 days I have the money. Works pretty smooth.
     

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