I AM switching to year round billing this year. Thoughts?

Discussion in 'Business Operations' started by crslolbkr, Feb 5, 2013.

  1. THORNTON SERVICES LLC

    THORNTON SERVICES LLC LawnSite Senior Member
    Posts: 405

    I did this in the past with a few accounts cause i thought it would be nice to have the income in the winter. It was a nightmare , more bills to send out , more work , off season around christmas people were not paying , they all cought up by spring but it was just a pain , i did this for a commercial account and they switched store managers in the fall i went in for nov because they had to pay out of register and the guy thought i was crazy and refused to pay me , even though the assistant manager new about it and i had the signed agreement from the last manager the guy still refused to pay , but in the spring they wanted us to cut the grass so i raised the price by 10 and charged by the cut , in my opinion you will be creating alot more work for yourself in this region , i would suggest monthly billing and get your money when you can , just my opinion though.
     
  2. THORNTON SERVICES LLC

    THORNTON SERVICES LLC LawnSite Senior Member
    Posts: 405

    It would be a different situation if you were in fl , oh in wv we average about 28 cuts per season , last year was low due to the drought.
     
  3. Exact Rototilling

    Exact Rototilling LawnSite Fanatic
    Posts: 5,355

    I hear you. I will only do 12 month billing for full lawn service and flat rated snow accounts.

    I'm thinking April through November for growing season only accounts. Or March 15th through November 15th.
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  4. crslolbkr

    crslolbkr LawnSite Member
    Posts: 48

    Thanks for bringing location to my attention Roger. Dayton is in planting zone 5/6 which means our cool season grasses grow from apprx. april through oct/nov. 7 or 8 months of mowing.

    The main reason to switch is consistent income. We get three snow/ice events per season on average (last year we didn't have any). I see it as a great idea with the exception of the potential for deadbeats. I've seen a couple of the larger local companies' contracts and they bill year round - granted they were both full service.

    I should note that 90% of my customers are guaranteed solid payers. And I feel very confident about collecting.
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  5. Efficiency

    Efficiency LawnSite Bronze Member
    from zone 6
    Posts: 1,536

    Chart your expenses and you will see the majority (40-45% or better) will come in the first 2.5 - 3 months of the season (20-25% of the calendar). When you are going thru 3-4 semis of mulch a week all spring, you will quickly see that 12 mo level billing is going to eat you alive. You will spend more in spring than you bring in and it will take easily until Aug or later for your income to catch up to your expenses.
    You need to try better record keeping. 28 mows is easy - last year our irrigated clients got 35-36 mows.
     
  6. crslolbkr

    crslolbkr LawnSite Member
    Posts: 48

    Thanks Efficiency, I see what your saying. I definitely appreciate your feedback. I can honestly say I barely analyze my expenses. I do use my business card for everything business related and sort the transactions on the statements at the end of the year. I'm sure that the expenses are front loaded even without big material purchases. In our area the rapid spring turf growth in the first two and a half months alone probably eat up 40% of fuel, oil, string and edger blades expenses. Not to mention whatever seasonal start-up issues there may be with the equipment. I have included in the initial letter (still a draft) and will include in the contract that material costs exceeding twice the monthly bill amount will have to be paid up front. So if a typical customer's monthly payment is $100 anything over $200 gets paid up front. Since all my accounts are small residential there will never be a $500 material cost that I will have to cover out of the businesses account.

    I think I will offer both the 8 month and the 12 month option to my customers. It seems like a good compromise to offer customers who would rather not pay their mowing bill when it is snowing. Also I am considering starting all new customers on the 8 month contract for the first year until they have proven to be as reliable as myself.

    Thanks for the help in considering the ins and outs of this issue folks, I have found it very helpful indeed. Anymore thoughts are very welcome.
     
  7. THORNTON SERVICES LLC

    THORNTON SERVICES LLC LawnSite Senior Member
    Posts: 405

    28 cuts is an average , most of our clients do not have sprinklers , this is all clients , take all your customers and we had an average of 28 cuts per season , on average of all years its 28 to 34 , but as i stated above last year it was dry so the 28 number was low , yes if you have sprinklers you will be at around 35 mows . My record keeping is fine thanks for your concern.
     
  8. advantage.lawn.care

    advantage.lawn.care LawnSite Member
    from Mid tn
    Posts: 15

    NO. Get your money asap. Most people do not want a bill in dec, jan feb, when nothing has been done.
     
  9. Utah Lawn Care

    Utah Lawn Care LawnSite Bronze Member
    Posts: 1,309

    I feel when people get a bill for their lawn when there is a foot of snow on the ground they could get annoyed. If your clients are super money conscious it may be better for a select few. Maybe it could be an option for each individual client, but I would stick to the bill at the end of the month for that months services. Whatever you decide to do keep us updated how things go.
     
  10. fedcopcutting

    fedcopcutting LawnSite Member
    Posts: 35

    commercial accounts 36 to 42 visits per season
    Residential customer: 32 to 36 visit per season
     

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