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thinking about switching over to pre-payment only

Discussion in 'Business Operations' started by marley, Sep 18, 2002.

  1. MJStrain

    MJStrain LawnSite Member
    Posts: 156

    You actually made them pay for March, April and May? You weren't even there!? Your tough dude. REALLY tough.:cry:
  2. CLM1103

    CLM1103 LawnSite Member
    Posts: 75

    I quote customers based on 12 months of billing. I bill at the last day of month and usually have all payments in by the 15th. I have a few customers that voluntarily pay a year in advance for mowing. My price is not based on any certain number of mowings, but rather "cut when needed". This works good for me as I have same income year around. I am in a retirement area where most of my customers return to Canada or northern states during summer months and only spend Nov. to March here.:blob4:
  3. marley

    marley LawnSite Member
    Posts: 91

    Do you have a couple of months in the winter where you do not go to the accounts? That is what I face here in wash. Are new customers pretty receptive to the 12 month 12 installment payment plan or is it a hard sell?
  4. JimLewis

    JimLewis LawnSite Fanatic
    Posts: 6,839

    I totally understand your frustrations. And there is a great solution to your problems. About 3 years or so ago we were having major problems with late payers, accounts receivable, etc. We were having like 30-40% of our money come in after the due date each month. It makes it almost impossible to pay your own employees and your own bills on time. I was frustrated to no end.

    Anyway, I came up with a solution that has totally solved our problems. I finally created a web page about it because I had so many people asking about it.

    For more information, go here;
  5. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Posts: 10,178

    i made them pay fir the months that i wasnt there, because: they were pita customers the year before, they nickle and dimed me, and they were always late. i sent out the contracts jan. 10th, they didnt think enough of me to call or ask questions or anything, they just waited, and decided when they were ready to have me, they would call. it is very important to me to stand my ground with customers, they must understand that i am a contractor, im not their employee. i always treat them with due respect, and i expect the same. lawn guys get mistreated because there r too many who dont stand thier ground, they bring down thier prices, and they allow customers to push them around. i have heard a million times from customers how, "my last guy didnt charge extra to trim bushes, my last guy used to clean the leaves and sycamore bark in the street every week, and never charged me extra.......".
  6. marley

    marley LawnSite Member
    Posts: 91

    I never even considered that method of payment. I guess I just assumed it was for banks and insurance companys. Thanks for your reply and that link to the web page you wrote. I was down in Florence over labor day weekend and I saw the sighn for Tigard on I-5 and thought of your company. Right now I am recooperating from an injury that happened while I was down there. It is almost a blessing in disguise because I have plenty of time to think about what things I would like to change about my company. One more quick question for you. For your customers that have the same amount taken from thier account every month, do they make 12 monthly payments or 9-10 payments(spring / summer / fall). I will probably bug you with more questions as I am still getting all my ducks in a row for this payment system overhaul I am about to do to my co. Any way Jim, thanks again.
  7. JimLewis

    JimLewis LawnSite Fanatic
    Posts: 6,839

    All of our accounts are year-round. They pay a flat fee all 12 months. Service goes down to every two weeks during the winter. And even then, we don't do nearly as much work as we do during the spring, summer and fall. But my prices take that into account. People seem to understand the year-round nature of our business.

    But the AutoPay thing could work either way.
  8. brucec32

    brucec32 LawnSite Platinum Member
    Posts: 4,403

    I'm amazed at how many operators can get people to pay 12 months a year. Especially in areas where there may be snow on the ground and certainly nothing growing much. I would assume that you'd have lots of grumpy customers in the winter when they're cutting you a check for basically blowing off their drives and maybe doing some cleanup work. I guess there is always something to be done though.

    I charge per-mow during the season and per-hour for extra work like shrubs, pruning limbs, mulching, etc in the offseason. I may make a little less in the long run,but I enjoy the time off and want to avoid the hassles of arguing with people about what I did during the winter. A guy I worked for had high turnover mostly because of conflicts about if he was earning his pay or not.
  9. bubble boy

    bubble boy LawnSite Bronze Member
    Posts: 1,020

    we are on monthly contracts, billed at the end of the month. about a quarter of our customers opt to give us six post dated chq's. payment on time, save on stuffing envelopes, stamps, etc. works great, and they know they can always stop payment if there is a prob.

    extras billed as performed. weed and feed up front, for bobbygedd's reasons. snowplowing up front, because we charge flat rate for season.
  10. Katwalk

    Katwalk LawnSite Member
    Posts: 92

    We don't actually offer pre-pay or monthly installment plan. Something we did change this year was to split the customer list down the middle and bill half the 15th and half the 30th. This has created a more consistent cash flow. About late payers....feel free to call these people and clarify the terms....you can be firm and friendly at the same time...they need to be reminded sometimes that payment is due upon receipt...the work has already been done.

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