Is this happening to you?

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

  1. txgrassguy

    txgrassguy LawnSite Gold Member
    Posts: 3,083

    I handle the potential slow pay issue with new clients quite easily - the full estimate amount must be in an escrow account if the client has no payment history with my company. I'm talking amounts beyond $5K - a $400 repair isn't worth the effort. On some repairs with fixed income retirees I will offer a payment plan to help them out a bit however if they miss one payment the balance must be paid in full. So far it has worked well.
    Got burned once on a $65K install job where I got stiffed on the last $12K which equalled my profit margin.
    So now anything over $5K with a new customer = escrow account to ensure full payment.
    On repairs I attempt to estimate as closely as possible using a T&M formula - it is here that I have been seeing slow paying. So far I have been burned for about $1600 on one repair. But what really burns my ass is the tax code change wherein loss of revenue due to lack of payment is not considered an allowable deduction.
    The only time I have really become aggravated was on this one repair - so I implemented an essentially untraceable "revenge". Dude never could figure out why his turf crapped out. Only time in twenty years I did this.
    Right now all of my maintenance accounts are on constant billing cycles so unless I get a brand new client I get paid in full now.
     
  2. SoCalLandscapeMgmt

    SoCalLandscapeMgmt LawnSite Bronze Member
    Posts: 1,800

    This was a regular landscape maintenance contract. As of last week they were only 60 days behind which is not at all uncommon for large commercial property management firms. We do over $100K a month just in maintenance so there is always somebody who is at least 30 days out.
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  3. Mike Leary

    Mike Leary LawnSite Fanatic
    Posts: 21,909

    When I was running a big crew, I bet I spent more time chasing money than chasing work.
     
  4. ARGOS

    ARGOS LawnSite Silver Member
    Posts: 2,808

    I am a subcontractor for the state for a couple of agencies. When the state budget doesn't get passed by June 30th, I don't get paid again until the budget gets passed (usually October). The agencies I work for send me a letter saying I won't be paid while there is no budget and if I want to stop working until the budget passes I am welcome to refuse POs. At least I know the deal.
     
  5. jvanvliet

    jvanvliet LawnSite Gold Member
    Posts: 3,939

    Gvt. is the worst slow pay... specially the school boards. At least you know you'll get paid but you have to work a 90 day float into the bid.
     
  6. txgrassguy

    txgrassguy LawnSite Gold Member
    Posts: 3,083

    I worked out a net ten arrangement with my local district but initially they wanted a net 60. The worst payer in my experience is the University of Texas. You are lucky to get paid with-in 90 days and your out of luck if they screw up the invoice payment amount.
    Right now I am headed to small claims court on a slow paying POA - four months out and they are still dragging their collective feet.
     
  7. MarcSmith

    MarcSmith LawnSite Fanatic
    Posts: 7,157

    GU is pretty slow pay. to the point that I have gotten a university supplied credit card to keep my vendors paid...it frustrating when you ask your vendors to jump through the hoops and they do it, and then they still don't get paid...
     
  8. hunterpreferred

    hunterpreferred LawnSite Member
    Posts: 181

    We have had several of the " Hey I decided to set up my own payment terms on this job/invoice". I would be more okay with it had we discussed this upfront. Lots of chasing for payment, those $100-$200 bills don't seem like much but man do they add up fast. Best thing we did was accept credit card for payment. Seems like they are more likely to pay when they can finance.
     
  9. ARGOS

    ARGOS LawnSite Silver Member
    Posts: 2,808

    I haven't been paid with a credit card in several months. It always seems like someone that wants the "points". The last three installs have actually paid cash.
     
  10. Wet_Boots

    Wet_Boots LawnSite Fanatic
    Posts: 47,363

    People that want to pay for an installation by a credit card kind of bother me. For something so far down on the "necessity" list, I would want them to have the funds on hand. Besides, I have my doubts about whether credit card payment of a deposit meets every legal test for binding a contract, since the payment can be reversed.
     

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