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Was this wrong?

Discussion in 'Business Operations' started by Green-Pro, Nov 3, 2005.

  1. Green-Pro

    Green-Pro LawnSite Bronze Member
    Posts: 1,420

    All season payments were being sent to us in timely fashion, last two months had been horrible, good payers going up to 2 months late some others, a few nearly 3 months late.

    Anyway we would put note on invoices of late folks avoid 5% late fee please pay by 08/15/05, still nothing. Now it gets to the point we had nearly 4k outstanding. I finally had enough, putting late penalty note on invoices and I've only called a few customers a few times (I was raised to pay my bills, pay yours!). So I sent a letter out to all customers, seasonal lawn service, one time landscape and hardscape customers, with the first of the months invoices.

    To date I've had a flood of payments come in and some calls from folks checking to see if they were in good standing. I had one client (a good client, good account) tell me in an email he had issues with some of his customers from time to time also, felt it was best to address them individually, and that my letter could be construed as threatening. I replied that I was only trying to set forth our payment policy in writing, as in the past we simply put due on or before 08/15/05 and when late added the late fee penalty note. I said to be fair to all and clear to all I had this sent out to each customer/account.

    Well here is a copy of the letter how does it sound to you guys and gals?
    I also told him the folks that are behind on payment and upset about the letter are folks I really may rethink for having accounts anyway.



    Attached Files:

  2. mtdman

    mtdman LawnSite Gold Member
    Posts: 3,137

    Sounds fine to me. I'd leave out the part about having expenses, it's hard to pay if you don't pay, etc. People understand the whole pay up on time thing, you don't have to explain it to them. It weakens your position to have to explain.

    As far as rude, I don't think so. I usually have to send a reminder out with a statement mid season to point out the payment and late fee policy. People get lazy, and slack off with the lawn care company if they think they can, because of a lack of consequences. You have to point out that there are consequences.

    If anything, I get insulted when I have to go tracking down money. I always point out, I'm in the lawn care business, I'm not a collections business.

    And you're right about the folks who are behind not being the ones you want as customers anyway. I just booted a customer the other day who was 2 months behind. I called to remind them 3 times, sent 3 statements. Finally I had to threaten collections to get them to pay. Then of course they tried to play it off as a simple misunderstanding. After 7 attempts to collect it's not a misunderstanding, it's deliberate. I got payment and ended the service. And when she tried to get me to come back for more, I politely declined.
  3. Runner

    Runner LawnSite Fanatic
    Posts: 13,494

    Some parts of it are good, some parts of it are a bit "standoffish". I would've never used the word YOU. - as in all of you. Whenever that woed is used, the defenses come up. I would've just said "all our customers" (or clients).
    Also, the 5% thing? That isn't squat, really. They are going to borrow from that - to pay REAL late fees. We don't instill the perverbial 18% annual rate, anymore. We put a flat late fee on ours - no percentage. you sock 'em with a $25 late fee (after 30 days), and that gets their attention. It's no different than your bank, or your insurance company.
  4. Brianslawn

    Brianslawn LawnSite Silver Member
    Posts: 2,004

    once their grass starts getting tall they remember to pay. do like bobby and charge monthly. start skipping if they are late, but still charge full ammount for month
  5. Popper357

    Popper357 LawnSite Member
    Posts: 217

    Man, I hate late payers, and it's a constant hassle in the maint biz. I feel you, I'm still owed from someone whos phone magically is temporarily not in service and I've spent many hours collecting from late payers, some maintenance accounts valued at more than 800 have been months late. It's tough

    But your letter is misleading if it were sent to accounts in good standing. It reads like your frustrated with the individual, even though it's being sent to all. A general letter should be concise "We just wanted to highlight our late paying account policy... Please let us know if there is a problem getting us the payment on time etc". Definitely keep is short and don't include any details about your situation or expenses. JMO
  6. Green-Pro

    Green-Pro LawnSite Bronze Member
    Posts: 1,420

    Thanks for the replies guys I will definitely put some of these suggestions to use in making changes to the letter. I mainly wanted to do a check to see if sending out a letter to all customers was a good thing or a bad thing from a business standpoint. The letter went out with the Nov. invoices my feelings were to make the policy clear, and be fair in sending them out, that is everybody got a letter. Basically I felt these folks had to understand you can't run a business on thin air thats why the brief explanation of operational expenses. Joe your right I shouldn't have used the word you. Brians Lawns I do bill by the month, but if you are referring to having people on contracts where in a case like this summer we experienced severe drought, well you wouldn't have much business around here charging a monthly rate for what could amount to 1 mow a month if that. Very few folks around here would go for that, not that I frown upon doing business that way, but I can only do what my market will bear.

    I just questioned becasue I got a call from 1 good egg account and she understood completely, email from another and he thought maybre it sounded threatening. Like I said we had put notes on invoices and attached late fees, but to no avail, I guess I felt we had to have something cast in stone so to speak and make it a requirement for all. BTW Joe the 10% I just docked one customer puts his late fee at $50+ for cutting 2-3 times, aeration, and fert & squirt. The $25+ hit he took the month before must have had no effect.
    Popper you brought forth some good suggestions also will keep them in mind for next letter.

    Hell I know its that time of year, property taxes were due, sending kids back to school, but good gravy I cannot be expected to subsidize the rotten eggs.

    Thanks for replies, but overall IYO will there be bad negative fallout from this or will it just wake folks up and get remainder of payments in. I mean we are always complimented on our service from quality, to dependability, to integrity. We recieve great comments from most customers quite regularly.
  7. Green-Pro

    Green-Pro LawnSite Bronze Member
    Posts: 1,420

    Screw it I guess I wanted to come off sounding a bit like a hardcase somebody had to do it. Will change that word you in the letter for sure though Joe. :waving:

    HOOLIE LawnSite Gold Member
    Posts: 3,981

    Funny to see this thread, since I have been contemplating writing a similar letter. I don't know what it is with customers this season, lately many have decided to make payments "optional".

    After talking to another member, I've decided to set up all new customers on some sort of automatic payment system. Existing clients with good payment history can continue to be invoiced. The deadbeats will be forced to switch to autopay, or else they will be dropped.

    After being in business for a few years now, I've slowly come to realize that extending credit is way too risky for ANY small business. Small businesses need a reliable cash flow to make it. Even if monthly invoicing is the "norm", it isn't the safe way to conduct business.

    Glad to hear the money's coming in Green-Pro payup
  9. Green-Pro

    Green-Pro LawnSite Bronze Member
    Posts: 1,420

    Thanks Hoolie,

    I guess I am simply at the proverbial fork in the road where I either sit back and wait for folks to pay when they feel they can or lay it down for all, this is how its gonna be. In the end I would rather be in a position of strength than one of begging or weakness.

    We have had such a great year $ wise and it is still going strong, just inked deal today on another patio install for week after next, fall clean ups going strong, and got approached to bring in some topsoil to go around a large new asphalt parking lot. Point is this business will in its first year support itself and our family, and do so through the winter quite easily. However it seems I need to be vigilant now more than ever to ensure we remain a player in the market and grow stronger. I just don't see how that can be done by not addressing this issue not only to the lateies themselves but to all clients. The way I see it, if you are never late, or even very infrequently late, and not by much you have nothing to fear and no complaint about the FYI letter. Now if you are late often and exceptionally you still have no beef in my book, because simply put you are in the wrong.

    Will have to keep you guys posted on any possible fallout, thanks for replies guys & good luck with the laties Hoolie


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