monthly vs per cut

Discussion in 'Lawn Mowing' started by sedona, Feb 15, 2001.

  1. sedona

    sedona LawnSite Member
    Posts: 11

    Hey everyone,

    I have some questions pertaing to how you guys bill and contracts etc. I did a search and read alot on this subject but still find it necessary to get some more feedback.
    This year I decided to setup my existing customers on a monthly fee versus a per cut fee. This fee I got is based on 30 weeks of cutting from April- oct. I am finding my self nervous because in some cases my customers where not necasarily cut every week last year due to weather etc., and the total for this year in some of my customers is significantly higher. I guess I would like to hear from people that bill this way and how do you handle this
    Thanks
     
  2. mowerman90

    mowerman90 LawnSite Bronze Member
    Posts: 1,491

    Here in Central Fl I mow year round. Weekly Apr -Oct then Bi-weekly Nov - Mar. About 40 cut per year. I bill the same amount every month. The few customers that seem to hesitate at this arrangment come around after I explain to them that the payments on my equipment are year round too. Actually, I compare it to the budget system with there gas bill when they were up north. Why pay an outragous amount in the winter then harly anything all summer? Same siuatiion here, why pay huge bills all summer then 1/2 during winter. One level payment all year round. It makes it easier for them to plan and budget their money.
     
  3. jay

    jay LawnSite Member
    Posts: 133

    If you feel that they shouldn't be billed for the cuts you didn't do than pro-rate them. Most of the time when you go back after two weeks the lawn is twice as high and takes much longer this to me makes up the extra charge most of the time.
     
  4. Currier

    Currier LawnSite Senior Member
    Posts: 564

    "This fee I got is based on 30 weeks of cutting from April- oct. I am finding my self nervous because in some cases my customers where not necasarily cut every week last year due to weather etc., and the total for this year in some of my customers is significantly higher."


    I did the the EXACT same thing this year. I've done this business for a number of years and it just makes sense to set a price for your service and then bill for it...and get the full amount. I was suprised when I looked at some of my year end records and realized how little some folks had paid for me to worry about their lawn so much. AND... guess who didn't renew this year? I say good ridance. No Need to keep "throwing pearls after swine".

    I was nervous also but I'm looking long run. Eventually new clients will add on and this is a system I can live and profit with.
     
  5. GreenQuest Lawn

    GreenQuest Lawn LawnSite Senior Member
    Posts: 822

    I take Price Per wk multiply by 28 weeks add fert,spring & fall cleanup, weeding, pruning, etc. add it all together divide by 8 March - October and they pay one set price per month regardless if i skip or not. if i skip the cutting I find something else to do (mabey trim a branch thats been whacking me or pull some weeds, something to let them know i was there. Monthly billing is great then i know exactly how much is coming in and can budget.
     
  6. GREG R

    GREG R LawnSite Member
    Posts: 105

    We do the same as greenquestlawn (above) except
    we offer 9mth (march-nov) and 12mth contracts
    12mth includes snow removal
    I perferr the 12 mth even though the payment is
    lower, its real nice during the winter months

     
  7. 65hoss

    65hoss LawnSite Fanatic
    Posts: 6,360

    12 month contracts only for commercial accounts.

    Seasonal agreements for residentials. But I bill on a per cut and other service basis. $$$ now are worth more than $$$ later. That is time value of money. In all finance and accounting classes and real world situations one of the most talked about issues is $1 today is worth more than $1 later. By the time you get your $1 later you could have made that $1 into more. Now inflation has caused that $1 to be less valuable to you than it was when you really earned it. You can put it in a savings account and earn interest instead of someone else. Its always better for you to have and use your money than someone else.

    I know the arguments about having income during the winter months. But it is the same amount either way, you are just letting the customer use your money for you. Wouldn't it be better to have the money already in an account for the winter months? What if some of them stopped paying? You will have no income for the winter months, but if you already had it in your account you don't need to worry.

    This isn't as big of an issue, but it cost you more in the long run. You use your time to do billing in the winter, mail bill with postage, cost of envelopes & paper that you wouldn't need to spend if you had collected it all already. Not to mention the hassle if someone doesn't pay you on time.

     
  8. GREG R

    GREG R LawnSite Member
    Posts: 105

    We only use 12 mth contracts if our customers use us
    for lawncare and snow removal, No 12 mth contracts
    for just summer services.
     
  9. TJLC

    TJLC LawnSite Bronze Member
    Posts: 1,308

    Down here people look at monthly billing one way and one way only. They are not going to pay a monthly fee in the slow months. They don't understand budget billing when it comes to their lawn. Electric bill, yes no problem. I myself can't understand what the big deal is. You pay one monthly price and no suprises. These are usually the same people that complain in the summer months that they are paying too much.HELLO
     
  10. sedona

    sedona LawnSite Member
    Posts: 11

    Thanks for the replys. I came up with the idea of monthly billing here as well as lots of good info. More concern is really based on that I have gotten response from a few of my customers(one from one of my best) and they say they do not like it because how can any one know how many times the lawn will need mowing. I guess they dont like to feel that will be paying for nothing. I have plenty of aurguments against that as I know alot of you guys do, but I thinking maybe I should have left more as an option, I don't know if this area(md) is used to this type of billing. Oh well maybe it will seperate the good customers from the bad, and of course there are many good customers out there
     

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