Pre Pays

Discussion in 'Starting a Lawn Care Business' started by bohiaa, Jul 13, 2007.

  1. bohiaa

    bohiaa LawnSite Fanatic
    Posts: 5,220

    You guys ever get pre pays ?


    I got this check in the mail yesterday, The customer said they wanted to pre pay, it's there summer home that they visit about 1 to 2 times a year.

    it was $8000.00 this should look really good on my taxes...:hammerhead:
     
  2. Langford2000

    Langford2000 LawnSite Member
    Posts: 167

    I get prepaid on one of my accounts - they pay for three cuts at a time. Sure beats the hell out of the no pays
     
  3. cgaengineer

    cgaengineer LawnSite Fanatic
    Posts: 15,783

    Thats fantastic! You must be doing a very nice job. Nothing beats money up front...nothing is worse then having to chase someone down to get money out of them.
     
  4. wooley99

    wooley99 LawnSite Senior Member
    Posts: 269

    Bohiaa,

    You're gripping about never having to chase this account for XX months?

    I sure ain't no accountant but having passed financial accounting once, I think the prepaid money is accounts payable and until you provide each portion of the service is a liability. May not screw up your taxes depending on your accounting method. Please keep in mind that I used to be Willie Nelson's tax adviser though so you may want to use some of the $8K to hire an accountant.
     
  5. IA_James

    IA_James LawnSite Silver Member
    from Iowa
    Posts: 2,593

    I've got a few that pay ahead some, one gal that's a saint and pays me a couple ahead, and another guy that was so happy I could mow his lawn on short notice for him he paid me for 2 months in $20's right there.
     
  6. GSPHUNTER

    GSPHUNTER LawnSite Senior Member
    Posts: 310

    Record it as a Work In Progress. Credit WIP for the $8,000 and debit it every time you mow for the amount you charge for weekly mowing. Then credit your General Revenues.

    As far as accounting goes, I think that's how it should be done.

    I have a couple people prepay each month. I like it, but it's easier to just keep everyone on the billing system in my opinion.
     
  7. carcrz

    carcrz LawnSite Silver Member
    Posts: 2,085

    I've slowly been converting my customers to prepay over the years. I started billing at the end of the month for services rendered. This is the worst possible way to do things because you are financing them for 60 days then. I then switched everyone to being billed at the beginning of the month for expected services & due before the last day of the month. If any extra services are done they will be on a separate invoice. This has worked very well because they only have one (maybe 2) invoice per month & they frequently prepay so they don't have to worry about losing their bill.
     
  8. GreenT

    GreenT LawnSite Fanatic
    Posts: 43,014

    bohiaa, I had the same thing happen.

    New customer, 2 acre property, $6,450.

    She didn't want to deal with the "monthly thing". You know it's such a hustle.

    :cool2:
     
  9. bohiaa

    bohiaa LawnSite Fanatic
    Posts: 5,220

    thanks, yea I was wondering how to handle the money, I dont have an accountant. just a tax man,

    thanks again
     
  10. lawnman_scott

    lawnman_scott LawnSite Fanatic
    Posts: 7,547

    All residentials prepay me. Not for the year though, just one month ahead.
     

Share This Page