Policy on collection $$$

Discussion in 'Lawn Mowing' started by JimLewis, Feb 27, 2002.

  1. JimLewis

    JimLewis LawnSite Fanatic
    Posts: 6,842

    I wanted to see what other people do in regards to collection money for one-time jobs. For instance, if you did a one-time clean-up for a client and mulching job totalling $650.00 what's your policy on payment?

    Reason I ask is it seems like some people say, "just leave me an invoice when you're done." And that's great when they send a check out the next day or even in the next week. But not all people do that. And I am tired of waiting for 2-6 weeks to get paid on jobs like this. And all it takes is 3 or 4 people like this to be late and it adds up to a significant chunk of money.

    With new clients I almost always get money at the end of the day. That's just our policy. But it seems that existing clients or those who have used us many times in the past just expect us to be okay with leaving an invoice and they'll pay later. And they always DO pay, my problem is it's not always as fast as I'd like.

    This is especially annoying during the winter. In the spring and summer I have plenty of money and can afford to let them pay later.

    The trouble I have with demanding payment immediately is it makes us look desperate. So I am trying to decide what to do. How do you all handle this?
     
  2. Randy Scott

    Randy Scott LawnSite Bronze Member
    Posts: 1,915

    I guess I don't have a solution to your question, I'm just in the same boat as you. I bill everybody and just wait. It sucks and I'm not a finance company, but it sure seems like it somedays. Funny how people don't take me seriously, even though I'm flesh and blood that will come knocking if I don't get payment, yet I bet their credit card payments are never late. If they are they get a $20 or $30 late fee. Yeah, if I were to do that they would tell me to piss up a rope. I don't get it. This year I am going to make a conscious effort to make sure they understand to pay promptly(good luck huh). Last year I acted too nonchalant about it and they probably figured with my attitude I wasn't too worried about getting the money right away. Well, nice guy days are here and gone.:mad:
     
  3. Jim
    You have problems collecting money, who doesn't?:laugh:

    Some suggestions that we have been using the last 20 years:

    Right up front, tell client that the invoice is due upon receipt and delinquent after so many days (this is typical of any bank, credit card provider) myself, on my invoice I have a due date which is 18 calendar days after generation of invoice.

    The kind of money you are talking about, provide a self-addressed and STAMPED envelope. Be surprised how some people are too lazy to go down to the post office to by stamps.

    For the worst offenders, knock on the door. I have only had one client who told me right then and there that they didn't have the money in their checking account.

    Going back to the first thing I said, do you have a due by date on the invoice? At least have something that says" your bill is delinquent after whatever days you determine. Just keep it reasonable.
    John
     
  4. JimLewis

    JimLewis LawnSite Fanatic
    Posts: 6,842

    Well, like I said, I only ever have this problem with existing or return clients. I am pretty good at explaining our payment-on-completion terms to new clients or one-time clients.

    As for invoices, yes, I always put "Due On Receipt." And yes, I've noticed a lot better response when I've enclosed a stamped self addressed envelope.

    Usually it doesn't bother me too bad. I guess it's just because it's winter and I had like $3000 in truck repairs this month that it kinda hurts right now.
     
  5. CS Lawns

    CS Lawns LawnSite Member
    from Iowa
    Posts: 92

    I did a big job last year it was a one time clean-up of a run down property. Totaled out at $750.00. I told them since they were not a current customer I would require 50% down prior to starting the job and the balance net 10 and if they were to become a regular customer I would invoice them for any jobs after this job. 2 days later they call give me the 50% down and 5 days after I completed the job I had the balance. They turned into a good account They purchase old forgotten homes redo and resale.

    anyway if they agree to 50% down at least you have 1/2 your money if the take forever to pay or stiff you.

    My .02
     
  6. kutnkru

    kutnkru LawnSite Silver Member
    Posts: 2,662

    Jim heres something you could try that seems to be a happy medium - get 1/3 when you sign them up for the work, 1/3 when you complete the work, and the final payment can be mailed. This way you have about 60% of your original invoice up front and $200 outstanding is alot but not as drastic as the entire sum.

    If you do a job a day on the low end, thats $3250 for the week. If youve already collected 2/3 the money, now your only waiting on $1100 vs. holding out your hand waiting for the eagle so to speak -LOL!!!

    I find this is also a fairly good pre-qualifier. If they dont have the funds right now "Because it'll be here end of the month", then I gladly put them first for next month. Im out here to make money just like every other working stiff - and contrary to public opinion, we're not here to get stiffed!!!
     
  7. I set a limit for charge customers. Anything over $100 in addition to their regular service, I ask to be paid on completion. I was worried about the same thing (being veiwed as desperate) but I had too much out in AR. Now I just ask "would you like to put that on your credit card or write me a check on (job date)". Just work it in as you give them a price and work date-before they can put you on the spot with "just bill me". I haven't lost any work because of it and I think most people understand unsecured credit can only be extended so far.
    Anyway like I said, I was a little uneasy doing this at first but now it's just habit.
     
  8. I like to get paid apon completion on all jobs, but this is not a perfect world.

    Landscaping 100% up front

    The rest get invoiced.

    Same amount of problems as if I were to collect at the door.
     
  9. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Posts: 10,178

    one time jobs go like this: 33% up front, balance due upon completion. i just need a check, and your autograph right here, and we will get started on......
     
  10. LAWNS AND MOWER

    LAWNS AND MOWER LawnSite Bronze Member
    Posts: 1,129

    It sucks the way people treat lco's when it comes time to pay. Just imagine them with a stack of bills. When ours makes it to the top of the stack, they just put our bill back to the bottom of the pile. Do they treat mortgage payments this way? I understand your delima (sp?) Jim. Large accounts receivable can be absorbed in the summer when the money faucet is turned wide open, but come the slow season, it would be nice to get these pennies in a timely fashion. Good luck.

    LAWNS AND MOWER
     

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