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What's your policy with customers who don't pay?

Discussion in 'Business Operations' started by Precision Lawns, Apr 25, 2005.

  1. Precision Lawns

    Precision Lawns LawnSite Senior Member
    Posts: 283

    This is our first season, and we think we have a good contract (all of our customers are on seasonal contracts) and we've had our lawyer go over it and he says it's good, but since it's our first season it's obviously not perfect. It very clearly states that the customer will be billed and they have to remit payment by the due date. If they don't, there will be a $10 late fee for every 10 days overdue. However, we neglected to put in the contract what will happen to their service.

    Today is the first due date of our first billing cycle. Every customer payed on time except one. Since we're mowing him today, we're going to talk to him while we're there about his payment (he works from home, so he should be there. He's also a lawyer, so he should understand contracts). If he doesn't pay by today, we're going to tell him (or leave a notice, if he's not home) that unless we receive his payment by his next scheduled mow, we're going to suspend service until we receive it. Once we receive it (along with any late charges that may accrue), we'll resume service. Does that sound reasonable, stopping service before late charges are assessed? Or should we mow him again since it's within that 10-day period before the late charges? My gut instinct is to have today be the last mow he gets until he pays, since it was due by today and if he doesn't intend to pay, I don't want to be out more time and $$$ by mowing him several more times. What do you guys do, and is there a clause in your contract that addresses this issue?
  2. mastercare

    mastercare LawnSite Senior Member
    Posts: 289

    I think that a nice, polite phone call will do the trick.

    When talking to him, inform him again of the late charge. Explain that you would normally discontinue service until payment is recieved, but since its his first time, and you understand how busy people can be, you will give him another cut while you wait for your check. This builds some goodwill, and lets him know there's a timeframe for stopped service. You should start getting his checks ontime. The worst that could happen is you get stiffed and give away one more free cut than you needed to.

    I have one customer from last year that never paid ontime. Always 2 weeks late. He never got hit with late charges, I kept a good customer, and knew that the check was in the mail. It stinks to get it late, but I never worried IF I would get it.

    BALDEAGLE LawnSite Member
    Posts: 133

    depends on your relationship with that customer, i guess...i've not had that problem w/ contract customers. luckily. i'd call first , i spose, we all have hard times...last winter for me!(still play'in catch up) NO SNOW! IN ND.!??? WTF!
  4. Precision Lawns

    Precision Lawns LawnSite Senior Member
    Posts: 283

    We don't have much of a relationship with this customer. He got our flyer, doesn't want to do his own grass, signed a contract no problem, and keeps pretty much to himself. As I said, this is the first billing cycle of the first season, so we haven't had much time to build relationships.

    We'll probably call him, I guess, and see if we can work something out. We need to keep our customers, but they're not much good to us if they don't pay, so hopefully we'll be able to work out a win-win situation.
  5. rodfather

    rodfather LawnSite Fanatic
    Posts: 9,501

    When things get out of hand, I send BG & Associates. Their motto is, "Have Shovel, Will Travel".

    In all honesty, for all the people who know me here on LS, I am most likely the worst when it comes to enforcing payments terms and/or allowing people to go too long to pay their bill with me. Frankly, I in some way look at everyone's payment history and what I will allow to "slide" almost on an individual basis. It works for me for the most part, but maybe not for others.

    I've been doing this full time now for 11 years and I know my AR's get too far outstanding. But, I live with it...
  6. Cut

    Cut LawnSite Member
    Posts: 133

    Dont Fareway have certain stunts to use on non/late payers?
  7. SodKing

    SodKing LawnSite Bronze Member
    Posts: 1,648

    I was going to say something along these lines but you beat me to it...lmao

    HOOLIE LawnSite Gold Member
    Posts: 3,981

    I wouldn't start harassing someone because they're a day late. Even the mortgage company gives you a grace period.
  9. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Posts: 10,178

    better cover your butt on the stop service thing. alot of them will be purposely late, so that you stop service, let u not show up for 2-3 weeks, then send a check with a note asking you to resume service. one problm, at this point, the grass has been uncut for 2-3 weeks, are you going to mow it for the price of a single lawncut? :nono: been there, done that, got the blisters to prove it. the dirtbag client thinks he is going to save the price of a couple grasscuts, then get you to come back by dangling the money he owes you in front of your nose. you'd better put something in your contract along the lines of, "if payment is not recieved by due date, we reserve the right to cancel/suspend service, at our discretion. in order for service to resume, account must be paid up to date, including the weeks that were missed due to non payment."
  10. Sweetwater

    Sweetwater LawnSite Member
    Posts: 66

    Dittos to Rodfather....I do the same thing.

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