Late payment Letter

Discussion in 'Starting a Lawn Care Business' started by magicmike, Jun 16, 2013.

  1. Kurt6845

    Kurt6845 LawnSite Member
    Posts: 121

    I agree with Caddyshack. I have a few that seemingly "forget" to send payment, some of them two months worth, and then I call them or send them a reminder letter. Payment is usually made quite promptly at that point. Another thing that I do is if I have a customer that missed last months payment, I reprint the invoice and send two of them, and the one that was from the month prior I will stamp with a PAST DUE stamp. It's red and stands out. I don't ad a late fee, unless it is a customer worth losing. Now, on that note, I do have two customers that have not paid from services back in February and March. I have added late fees for all the invoices unpaid and sent them an other than pleasing letter. I have received a response from one and she is making arrangements to pay(allegdedly), the other, still nothing. It sucks when you lose out on money, but when you get down to brass tacks, for example, one of the customers I'm speaking of owes me $210. For the work we performed, it cost me maybe $40 (fuel, labor for 1 employee, time, equipment wear and tear, etc). So am I really out $210? No, I'm only out my expenses, it still sucks, but that will lessen the pain when you look at it that way. Good luck!
     
  2. Caddyshack Lawn Care

    Caddyshack Lawn Care LawnSite Senior Member
    Posts: 738

    Update: The mail just arrived today. I've got a big ol' smile with one of the checks. One down, one to go.
     
  3. GOATMAN GEORGE

    GOATMAN GEORGE LawnSite Member
    Posts: 88

    I put payment due in 15 days after I bill. If no payment is received I send a letter very politely telling them their payment has not been reveived & is now late. then I send a.certified letter in 10 more days saying if payment isnt received in 30 days im beginning legal proceedings. idc if they have a bad taste or drop off , if they cant pay on time they disrupt cash flow and I could fill their slot w someone who pays on time.

    If the customer contacts me sayong they r having problems I will gladly grant them a lot of grace time, but if no contact im always sending out late letters.
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  4. 32vld

    32vld LawnSite Gold Member
    Posts: 3,984

    I have one commercial account they are late payers.

    I would drop of the invoice after I finished their last service of the month. Example 6/25. They would mail out the payment a two weeks after 7/31. So I then wrote a due date on the next months invoice.

    Example last service 6/25. Invoice, payment due 7/9/. They read and know that I expect payment in two weeks.

    Of course customers test you as this customer did. 7/10 no payment so I sent out the past due invoice. No threats to cut off service, or add late fees.

    End result, last invoice was for 5/28 due 6/11. I just got the check in today's mail for the month of May.

    Yes 6 days late. I can live with that. Better then waiting 6 weeks. They are always about 2 to 7 days late.

    The key is before you do the first job is to let the customer know when you expect to get paid when you the customer agrees to hire you.
     
  5. zacher

    zacher LawnSite Member
    Posts: 67

    I put it on my billing invoice...

    I dont know if anyone else does this but for example...my bills are due by the 5pm the 5th of the month for prior months service..On my billing invoices I state if a bill is late or delinquent I charge 10% of the contracted amount as a late fee on the next bill. I let the customer know a 10% charge will be accessed...Of course if its the first time they do it I am nice about it and just remind them that it can be added...second time again I probably wont charge depending on if the fees are consecutive or not...third time someones late...yeah ill probably add the fee...

    Patience is a virtue but as stated earlier...you did work and you expect payment. In the end your not neighborhood kid...your a business you wouldnt walk into walmart and expect to pay for your stuff 5 months later...you wouldnt get away with signing for a car and not paying for 2 months or paying late every month...as LCO's we need to understand this.
     
  6. magicmike

    magicmike LawnSite Senior Member
    Posts: 266

    Yea i understand what your saying but I dont have time to waste if a customer isnt going to pay me instead of mowing their house I can be out handing out flyers or something else productive. I cant lose this house thats why Ill probably do it for another 2 weeks or so. I would have your mindset if this was a customer who has made previous payments on time in the past but this is his first month of service (even if he made one on time payment).
     
  7. Wayne's Lawn Service

    Wayne's Lawn Service LawnSite Member
    Posts: 184

    Caddyshack - I understand what you are saying about your accounts and that is a great relationship you have with your customers. I had a similar experience when I had less than 50 accounts as well. However, as our company grew we had some clients that thought we were in banking instead of lawn care and wanted to finance their accounts.

    Keep up the good work and good luck this year.
     
  8. DoubleClutch

    DoubleClutch LawnSite Member
    Posts: 165

    I just left a late payment note on a PITA customers door yesterday. From the first time I went out to do a estimate on leaf cleanup hedge trimming and first time mow that was 12in high grass. I gave her the cost to do it and we set a date to do the work. I also got a biweekly service from her. When it came down to getting payed it took 3 weeks after she told me that she would leave the check taped to the door the day I did the work. And every time I went to mow and trim biweekly there was no check on the door and she would send it in the mail a week late. I have talked to her on the agreement of getting payed the day of service the after the 2nd time I mowed and she said she would start leaving it on the door. But no she still does not leave it and sends it 10 to 14 days after words. This last service ( 14 days ago) and still no payment and no return calls after leaving messages on her phone many times. So I left a message when I was in the area cause she was not home and stated that payment is due buy the end of the month or a late fee will be added and service will not be done until payment is received. I can loose this customer and wont bother me at all. She has had other LCO give her bids before I started cause I was the lowest bid. So now she can call them and give them greef!! I cant afford to not get paid monthly right now cause I am just starting out and don't have that many customers each week. But I am adding new customers each week. I give them more of a personal service than other LCO's in the area. I don't just show up and do a fast trim and mow. I treat there lawns like it was my own and want it looking great when I leave. I watch a LCO for a while in a area where they mow 4 or more yards and they where just postage stamp yard's. 1 guy trimming and 1 mowing on a ztr and it looked like crap!!! No trimming in the back yards. Grass was scalped. Spin divots in the grass. And the kicker was the left side of there deck must have been lower than the right!!! Ok enough said I got to get moving the rain stopped and the grass is drying and got to get clients taken care of!!
     
  9. lawnkingforever

    lawnkingforever LawnSite Bronze Member
    Posts: 1,280

    I agree. I just dropped a very long time customer over late payments. I am not a finance company nor do I want to be. I used to be more forgiving not now. A dollar is not worth as much if you have to wait weeks to get it. I manage my company for profitability and operate it for cashflow. The lady I dropped was one of my first customers and in a neighborhood where I have 8 other yards. My tolerance level is very low for late payments.
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  10. KWLawnSnow

    KWLawnSnow LawnSite Member
    Posts: 17

    I am still waiting to get paid from a snow plowing job i did this past winter!! She hasn't contacted me at all!! I'm giving it one more week then i will be taking it to court, i was nice at first, but like lawn king said, I'm not a finance company, just provide services for those who pay & pay on time!!!!
     

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