payment terms

Discussion in 'Business Operations' started by General Grounds, Aug 7, 2011.

  1. General Grounds

    General Grounds LawnSite Senior Member
    Posts: 902

    hi everyone, i was just wondering what your payment terms are, collection methods, etc. ive tried everything from credit cards to 2% discount for paying invoices within 7 days, and my recievables seem to be slower than ever. anyone else dealing with this also?

    thanks tony
     
  2. Ben Bowen

    Ben Bowen LawnSite Bronze Member
    from PNW
    Posts: 1,058

    We have tried the same things. Being able to take cards online has been the biggest help. But I am still surprised how slowly a lot of people pay. I think prepayment is the only way around it. If you aren't a month ahead you will always be behind.
     
  3. american dream

    american dream LawnSite Senior Member
    Posts: 294

    Welcome to the lawn carecbiz! We have tried it all it comes down to we are so easily replaceable,sad but true and that's a fact!
    Posted via Mobile Device
     
  4. Woody82986

    Woody82986 LawnSite Silver Member
    from DFW, TX
    Posts: 2,128

    Invoices go out on the 30th of each month for that month of work. Payments are due by the 15th of the following month either by check or online by credit/debit card. I only offer a small discount for clients who want to prepay for the entire season up front before the season begins. There will always be some clients who pay as soon as they get their invoice. Others that will wait until the last second to send payment and even others that will be late almost every month. It doesn't matter whether its a lawn care invoice, a cell phone bill or their mortgage. It's a more basic reality about how people view their finances and their financial commitments. It's very unlikely you will change their payment habits. I think you can only hope to set your terms up to best accomodate your needs for cashflow and to best deal with the fac tthat different people have different views on making payment.
     
  5. MarkintheGarden

    MarkintheGarden LawnSite Bronze Member
    Posts: 1,072

    I think of it as three separate categories; 1, outstanding balances, anything within a 30 day turnaround. 2, late pays, anything beyond 30 days. 3, Collections, anything beyond 60 days.

    Some of my best customers fall into the late pay category. I let them pay as they please, and I make sure that I am charging top dollar for their services and we all seem to be happy with that situation.

    After sixty days, I send a notice and most buck up with an apology. Those that do not, I get persistent with and I have ways to get them to pay.

    I plan my finances knowing that there will be late pays, and I make sure that I can wait for it and that I am getting premium pricing on their accounts. I do not stipulate or collect late fees. I max out the cost of service and deliver premium services at a premium price. So, in effect what I have done is turn what could be a negative into a positive.

    Someone posted and said that we are replaceable. I am not replaceable, my customers want my expertise, reliability, customer service, and flexibility. I have excellent customer loyalty in part because I am flexible.

    Provide premium service, excellent customer service, and plan your finances so that you can be somewhat flexible. This is what affluent clientele wants and if you deliver it, you will be irreplaceable, and working for top dollar.
     
  6. PLS-Tx

    PLS-Tx LawnSite Silver Member
    from Texas
    Posts: 2,385

    For slow payers we like cc/debit, it puts us in control of the when we get paid.

    On line bill pay works well too. We prefer this over any other form of payment. There is no cost to us at all and the check is in the P.O. Box like clock work.

    The younger folks will usually chose one of these methods. Most of the older folks we send an invoice and they mail a check.
     
  7. vencops

    vencops LawnSite Bronze Member
    from NC
    Posts: 1,537

    I'm Net-30 with all my current customers. But, each one of them - I either knew, personally.....or, they were referred by someone I know.

    I've been fortunate.
     
  8. capetrees

    capetrees LawnSite Member
    from ma
    Posts: 217

    I'll keep reading this for more info. As some may have seen from my other thread, I'm in the hole with one client at the moment. :wall:realmad:

    As mentioned though, I've been fortunate to have worked for 99% decent honest people that pay their bills for years. Every once in a while you get an ahole.
     
  9. POWER STROKE

    POWER STROKE LawnSite Senior Member
    Posts: 300

    "Net 15" I mail out my invoices on the 30th for that month and payments are due the 15th of the next month. Works out great for me so far. Also at the beginning of the season I ask for 1 month in advance, just in case I have a customer who does not pay.
     
  10. ptjackson

    ptjackson LawnSite Member
    Posts: 211

    I think making it easy to have clients pay. What's ideal if they can just setup to pay automatically I know sites like freshbooks.com does this or paypal recurrring payments.

    Also it seems like every person with a smartphone should get a free square reader squareup.com it charges 2.75% and you can swipe their card right onsite. Might be easy as you leave the worksite to say, I'm finished would you like to pay your bill while I'm here?

    just a thought but I've used squareup and it's pretty cool, and the reader is free. I think quickbooks has something similar
     

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