unpaid accounts

Discussion in 'Business Operations' started by way to grow, Jun 13, 2004.

  1. way to grow

    way to grow LawnSite Member
    Posts: 46

    I started my lawn spraying business this last fall and am up to 180 accounts, but am having a hard time with people paying me promptly. I've been finished with my 2nd app for a few weeks now and only about 1/2 the checks have come in. Is this pretty common for you guys? Any ideas to speed up the payment process without bugging the customer too much?
     
  2. kootoomootoo

    kootoomootoo LawnSite Platinum Member
    Posts: 4,369

  3. Dwan

    Dwan LawnSite Member
    Posts: 87

    rase your price 10% then offer a 10% discount if paid within 10 days of biling.
    If they intend to pay ontime it won't make anydifferance on there price but if they didn't intend to pay rightaway then they should pay an extra 10%
     
  4. TSM

    TSM LawnSite Senior Member
    from MA
    Posts: 711

    many folks will 'file' the invoice and pay it on 30 days. That typically means that 30 days after they 'filed' your invoice the decide to sit down and write a check, then figure another day or two before they 'get to' putting a stamp on it. Few days in the post office hands and then it it your mailbox.

    our invoices state that 'payment is due upon receipt of invoice' which we left at the door when the app is done. Some folks will write a check the next day....but not most. To cut back on this 'delay', we do several things.
    #1) we offer a prepayment discount...about 30% of our customers take advantage of this. They send us a check for the entire season and recieve a discount.

    #2) we offer a 10 month billing. we provide a coupon book, simulsr to a banks for an auto loan, they make 10 equal payments. We make the first payment due in February this way no one falls behind in money they owe us. About 20% of customers go this route. Especially those who use on line banking where they can set up a 10 paymnet on their computer.

    #3)"Any ideas to speed up the payment process without bugging the customer too much?"
    Customer owes us money for a service they requested...we do not feel we a bugging them! 30 days after an invoice is left at a customers door we send out a statement with a letter. Just a freindly reminder, we also charge 1.5%late fee (not a lot of money but it ussually covers the cost for doing this mailing). We run a program that is 6-7 weeks between applications. Our 30 day letter informs them that their lawn will be due for its next app in about 2 weeks and that we can not service them if they have an outstanding balance. Two weeks after that letter/statement is mailed...if they still have not paid us..we send a 45 day notice..this letter informs them that we are very aware that they still have not paid us and that their lawn is now due for its next application, we stress the importance of timing of applications for the benefit of their lawn. two weeks after that letter, if we still have not been paid, we send out a 60 day past due notice. this is worded quite a bit more firmly. We let them know that no further service will be scheduled until they pay us the $$ they owe us and another 1.5% is charged in interest.
    Rarely do we have to use the 60 day letter, as a matter of fact, when we do have to send out a 60 day letter we automatically cancell them....but we keep on pursue for our $$$. thats when I start calling tham or might even stop by on a suprise visit. If we need to we send out a 90 day WAY PAST DUE notice informing them that if we do not recieve paymnet within the next 10 days we will file a small claims court suit....never had to, but will if need be
     
  5. BSDeality

    BSDeality LawnSite Silver Member
    Posts: 2,850

    i use net-15 billing and split my customers into billing on the 1st and 15th of the month. I highlight due dates on all invoices. People like to put us at the bottom of the pile.
     
  6. DFW Area Landscaper

    DFW Area Landscaper LawnSite Silver Member
    from DFW, TX
    Posts: 2,116

    I got signed up to accept credit cards this year. So far, I've been having problems getting the rate promised, but it looks like I'm on the verge of solving that problem. Once I get my credit card processing fees where they should be, it'll either be a deposit of $300 (which is my average on accounts where I've been stiffed) or a valid credit card on file. The way I see it, if they don't have a credit card, I don't want them owing me money.

    Later,
    DFW Area Landscaper
     
  7. Aleman

    Aleman LawnSite Member
    Posts: 204

    Id like to know abaout the 180 accounts also. Im trying to grow my spray business and 180 accounts would be great....
     
  8. lawn

    lawn LawnSite Senior Member
    Posts: 344

    TMS can you post a sample of your letters please?
     
  9. Team Gopher

    Team Gopher LawnSite Platinum Member
    from -
    Posts: 4,041

    Hi way to grow,

    Another idea is to bill in advance.
     
  10. way to grow

    way to grow LawnSite Member
    Posts: 46

    Thank you for all your suggestions! You guys are great! I'm going to try all those ideas out. I got up to 180 customers by simply knocking doors and if nobody is home I have an attractive flyer that I leave with a bid. I started last fall and ended with about 45 customers, everyone else is new. This past week I hired someone to spray for me so I can just focus on building the business. I'm now up to 190. Thanks again for your help!
     

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