Is this happening to you?

Discussion in 'Irrigation' started by DanaMac, Aug 2, 2010.

  1. germann

    germann LawnSite Senior Member
    Posts: 259

    This may sound crazy, but we are generous with people when it comes to payment speed. Alot of people are just busy or lazy, or are out of town all the time, and don't pay for 30-60 days. When I call or email a reminder, I always say I wanted to make sure they did recieve the invoice and am very polite-sometimes it gets pitched with junk mail. Even with people who are slow for cash flow reasons, we have found being patient and nice really builds loyalty and referrals. We go 90-120 days alot of times without charging fees. This is excessive, but I think treating people with respect in this matter builds great relationships. The only people I get frustrated with are those who work our prices down, are difficult to please, shop around all the time, and then pay late on top of it all...:hammerhead:
  2. AI Inc

    AI Inc LawnSite Fanatic
    Posts: 25,392

    A real lot of my customers only get paid once or twice a month.Mail always picks up from the 27th to the 5th.
  3. Mike Leary

    Mike Leary LawnSite Fanatic
    Posts: 21,983

    I can't go 90-120 days at my suppliers without being "in jail"; why should any client pimp you for that long?
  4. germann

    germann LawnSite Senior Member
    Posts: 259

    I look at it as a perk-It is fairly cheap to be patient as long as you are not desperate for the cash, and like I said, people appreciate patience. Many guys do a 5% prepay discount, which is much more expensive. At todays interest rates $1000 only earns about $20 in interest over 12 months, so as long as you have decent enough cash flow to cover yourself, your patience only costs you a dollar or two a month.
    That said, you need to know the customer-and their probable reason for being late. I am not as patient with jerks.
  5. jvanvliet

    jvanvliet LawnSite Gold Member
    Posts: 3,939

    Any repair work or installation I think is going to run over $250.00 involves a written agreement outlining the scope of work, contingencies, payment terms, late penalties, and unless I have a long term relationship with the account, or receive an explanation for the delay, the absolute certainty that if I don't get paid, a mechanic lien will be filed at their expense.

    If I have to pay for materials, I get a check for the material costs (plus my usurious markup) when I deliver the goods. At least I won't be out the hardware costs.

    Maintenance accounts have written service agreements even if they are only a couple of $$$ a month for a small system.

    Mechanic Liens are cheap to file and you can do it yourself, at least in FL. Templates are available on line for free.

    Too many people skip out on you down here, specially homeowners. Usually the first letter of intent is sufficient; if not, they weren't in a position to pay any way so I may as well get on the wait and see line since liens are paid in order of the filing date.
  6. MarcSmith

    MarcSmith LawnSite Fanatic
    Posts: 7,157

    Plus you get interest and penalties. I had one for a landscape isntall that a guy sat on for 3 years.... 18% is a nice return....
  7. DanaMac

    DanaMac LawnSite Fanatic
    Posts: 13,156

    To tell the truth, I don't mind if people need to pay in 2-3 installments. I would just like it if they would have the decency to call and ask or explain the situation. Rather than sending a check for $200 when the bill was for $500. Call and talk to me a little first.

    or they can pay by credit card and get it taken care of now.
  8. SoCalLandscapeMgmt

    SoCalLandscapeMgmt LawnSite Bronze Member
    Posts: 1,829

    Could be worse.... I just found out Friday that one of our better clients just had several of their properties go into receivership. These are $8mil to $9mil office properties. We take care of two of them. Good news is we'll get paid from last Friday on out. The bad news.... there is no guarantee that we'll get paid for the last 3 months of work that they owe us for. That ought to be good for about a $7500 headache!
  9. Mike Leary

    Mike Leary LawnSite Fanatic
    Posts: 21,983

    Why do you let stuff go 90 days? :dizzy:
  10. DanaMac

    DanaMac LawnSite Fanatic
    Posts: 13,156

    Ditto. I wouldn't keep doing work if they are that far behind. Mine are all one time jobs, not continuous jobs or contracts.

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