Incomplete payers! :angry:

Discussion in 'Lawn Mowing' started by Evan528, Jun 17, 2004.

  1. Evan528

    Evan528 LawnSite Silver Member
    Posts: 2,144

    How do you guys go about handling people who like to only pay a portion of a large bill?? Last year I started having such a problem with this that cash flow became a real problem. How do you pay yourself, for materials and all your expenses when so many clients pay $400.00 out of a $1200.00 bill? This year I decided to get tough on this issue....I started adding a late fee every month to people late or imcomplete on there payment. It has helped somewhat but I am still chasing people every month who insist on paying what they feel like that month.......instead of the entire balance.

    What I have also started doing this year is playing dumb when I get a check for only a percentage of the balance due. I call and act concerned that they made a error in the check amount they sent. This ussually makes them feel a little foolish and they will send the balance (some of the time). The reason I am writing this thread is out of frustration. I just called a client about an hour ago who had a $1450.00 balance from Mays invoice. Today I received a check for $500.00 with no explanation at all. I called and did the "play dumb" routine and he tried to turn it around on me. He told me this bill did not fit into his monthly budget and will pay the rest next month. He did know what this was going to cost before the work was preformed. I was told " you have the personality of a lawyer right now" (this man is an attorny I might add). After I explained the complete balance must be paid he then said "I will do what I can" and hung up on me. Are you guys facing this problem as bad as I am? WHat is with people not wanting to pay there bills when obviously they have the money? And then even having the balls to be rude because I want the money I am owed! I am by no means wealthy yet I pay my bills no matter what, when they are due. If I can aford to pay for it right now....I dont have the work done to begin with. Sorry for the rambling......How many of you are pulling your hair out over this?
     
  2. AL Inc

    AL Inc LawnSite Bronze Member
    Posts: 1,218

    Get your money this season and get rid of clients like that next spring. I do it every year. There are usually 2 or 3 who really get under my skin with things like paying late, etc.
     
  3. Lawn Dog2001

    Lawn Dog2001 LawnSite Bronze Member
    Posts: 1,027

    I have had this happen. It sucks. People dont seem to realize that we need to make a living to.

    A few years back I did away with normal monthly billing. For grass cutting I bill in sequences of 4 mowings. You pre pay for 4 mowings up front, and receive an invoice due net 15 days for the next four mowings. This has worked very well for me. The only downside is that different groups of people have to be invoiced at different times, which can be a real PITA for my wife and I. But it is a small price to pay for not having to worry about payment.

    For Landscaping, and I am very strict on this. 50% is to be paid at least one day before a job begins. The remaining 50% is to be paid the day of jobs completion. I strictly enforce this with a required signed contract.

    For Pest Apps, all but 4 of my accounts are sold in prepaid packages due in Febraury of each year. Here I will bend a little because I am really trying to grow this end of my business. The customers that due insist on paying per treatment, I will not apply the next treatment unless the previous bill is paid.

    I have posted this before, and everyone seems to say"I would not be able to do that. Nobody wants to pre pay." Well I do it and it has saved me a ton of headaches. Customers that are on my current roster know and trust me so there is never a problem. Sometimes new customers are intimidated by my terms. So I will provide them with references to ease there concerns. If thats not good enough, I do not bend my terms.

    I look at it this way. I know how I am. If I am paid to do something, It will be done. As a matter of fact some customers pre pay me only for the fact that, once I am paid they know I am locked into doing the job.

    Maybe unorthodox a little bit, but trust me it does work.
     
  4. LIBERTY LAWNCARE 2

    LIBERTY LAWNCARE 2 LawnSite Member
    Posts: 84

    On all jobs that require materials, I collect the entire amount to the GROSS (not my cost, their cost) of the materials and 1/2 of the labor (usually to cover payroll) UPFRONT with a signed contract.

    No ifs, no dances, no nothing. Pay my way or go away.

    The only exception to the rule are customers that have been in good standing and are currently in good standing with us.

    If the customer makes me even the slightest bit uneasy or I get a bad feeling about them, it's Gross Materials & 1/2 Gross Labor UPFRONT & the rest before we do a darned thing.

    If your intuition says "Something isn't right here" LISTEN TO IT!!!!
     
  5. Mindless

    Mindless LawnSite Member
    Posts: 95

    FWIW...offer customer contract at beginning of year and incentivize contract with discount price...whatever you decide. Maybe that little carrot up front is enough to sign. It doesn't have to be at the start of the season...whenever you pickup a new customer. If customer doesn't commit to contract, and you are getting partial payment, immediately send statement with balance and indicate if not paid within a certain time period, they're on there own and then file lien on property.
     
  6. olderthandirt

    olderthandirt LawnSite Platinum Member
    from here
    Posts: 4,900

    Only ask for 10% for most any job and the rest upon completion. I use a contract and if you don't pay I'll have a lein on your house by the next morning. Sooner or later I get my money with intrest. I don't need my customers to bankroll my business I always have a little working capital to use for jobs. The only exception would be large jobs of over 20k then I would need more down as I would be purchasing alot more materials.

    Mac
     
  7. Palmer Lawn Care

    Palmer Lawn Care LawnSite Member
    from Maine
    Posts: 42

    Here is how i get my money, it works everytime, although it might not work in some cases. ;)

    after 30 days of not paying they get a invoice every week
    50 days a invoice every day
    60 days start charging 2% interest
    80 days take court action

    Ive never had a person not pay me :)
    The highest I ever got to was the day I threatened to take court action.
     
  8. NNJLandman

    NNJLandman LawnSite Bronze Member
    Posts: 1,306

    Find a local company you don't like and tell them you have some leads for sale, sell the accounts, make the money you lost or were costed in the ordeal. :)
     
  9. DFW Area Landscaper

    DFW Area Landscaper LawnSite Silver Member
    from DFW, TX
    Posts: 2,116

    For me, it isn't the missing cash flow that causes me problems...it's the guessing that drives me nuts. Are they gonna stiff me or aren't they? That's what drives me crazy. I hate suspending service over non-payment. But get used to it, as long as you're in the business of extending credit, you're going to lose a good percentage of your customers to non-payment.

    And that's the part that ticks me off the most. Yes, I'm mad when I get stiffed. But losing the revenue, losing the customer, that sucks too. Getting customers isn't easy.

    Here's what I'm doing to solve the problem, and my story. This spring, I got signed up to accept credit cards. However, I had some stupid looking lettering on my truck that looked like a part timer. When I'd tell customers they had to place a credit card on file, it was like pulling teeth. They wouldn't do it. So I got the truck re-lettered (looks good photo is here http://www.meierslandscape.com/our_services.html ) and then I started offering either pay the last month up front or place a valid credit card on file. About 3/4 of the folks were whipping out the plastic.

    But then I noticed that my credit card transactions were costing me close to 5% because all of my Visa stuff was "non-qualified". I'm working with the processing company to get it fixed. Once I see that everything is working, it'll either be 10 cuts pre-paid or a valid credit card on file. You can still get stiffed pretty bad even with a month pre-paid, because they've got some time to pay the bill after you bill them and then they've got another 15 days after it becomes past due before you suspend service.

    It takes guts to suspend service, but you've got to do it if they're not paying.

    Later,
    DFW Area Landscaper
     

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