When to go after late payments

Discussion in 'Business Operations' started by zz4guy, Aug 9, 2007.

  1. zz4guy

    zz4guy LawnSite Senior Member
    Posts: 901

    I've got a customer that I mow about 4 properties for. He gets about 30 days to send the bill in before it is considered "late".

    So far about 5 weeks have gone by and no payment, ie about a week late. When should I start making phone calls? I dont want to harass the guy because he has payed before and gives me a lot of business.

    But at the same time I am not out to mow for free. What if he ends up not paying me.
     
  2. topsites

    topsites LawnSite Fanatic
    Posts: 21,653

    First I think you're about on target in the sense of the time-frame... You have to give them at least 30 days but you don't want to wait too long, historical data from collectors shows that after 90 days your chances of being paid at all drop to half... So you need to get paid within that 30-90 day frame of time, and there are other reasons but that's the gist of it.

    Several ways of doing it, and one hates to play preferential treatment but I have 2-3 such customers that spend so much money and never flinch when I quote what they owe me, like when I say 700 and they hand it over like it's just lunch money... I find one doesn't want to chase after those who appear to have it but so hard, sad but true.

    What I do when I start to get a little nervous is on the very next bill add a note that says 'prompt payment ensures continued service.' Just leave it at that, that's it, any payment will do at this time but I leave it at the above and that usually gets a check my way, at least it's always worked with this type of customer in the past... On a sidenote, it also tends to work with lower income customers, and I use that method with them if they've been with me for more than a season, say a 2+ year long customer for instance, and it tends to work there also.

    This way you've remained polite, there's no immediate threat there, but you are reserving the option to withhold services at this time. Meaning you can still use your own discretion should you not get paid but I usually see a check within days, other times 1-2 weeks at the most, and good luck.
     
  3. carcrz

    carcrz LawnSite Silver Member
    Posts: 2,085

    One thing I have done to keep from me financing their services is to bill @ the beginning of the month & have it due on the last day of that month. If there were any extra services that month (i.e. leaves bagged, landscape maintenance, etc...) I add them on the next invoice.

    My older customers & businesses have thanked me because it takes all of their weekly invoices & puts them all in one place.
     
  4. HBLandscaping

    HBLandscaping LawnSite Senior Member
    Posts: 268

    I have one client who seems to be late every month. I give a 30 day period to be paid, If I havent seem anything by the time the next round of bills go out (Like TOPSITES said) I put a little note at the bottom that says that payment for last month service is still due.

    The good thing is this client of mine is my neighbor (right across the street from me) So I see him come and go. He has been a client for 4 yrs now and every year its the same old, Sometimes he's even 2 months behind. I talk to him atleast every few weeks and always give him **** like" Hey man wheres my money? Dont make me put a lawn chair in your driveway and wait for you to come home everynight (Then I smile and laugh). Just dont go over 45 days which I have found allows for everyday "**** I forgot to put that check in the mail" and other everyday reasons why they just slip the mind.
     
  5. mdlwn1

    mdlwn1 LawnSite Silver Member
    Posts: 2,443

    Is he a developer? If he is.........MAKE him play by your rules
     
  6. zz4guy

    zz4guy LawnSite Senior Member
    Posts: 901

    Thanks for you guys' replies - they are helpful.

    This morning I just got a letter all ready that said IMMEDIATE PAYMENT DUE FOR CONTINUED service... wouldn't you know the payment shows up today too!

    So I guess he's good for it, but he's a late payer. He's not a developer by the way he's a realtor. I know I know...
     
  7. HBLandscaping

    HBLandscaping LawnSite Senior Member
    Posts: 268

    My moms a Real Estate Agent and I have done many jobs for her and a few "Select" People in her office. Notice how I said "SELECT" LOL, I only take on work from those who I have known for a few yrs and can trust. I have also worked with 3 other real Estate Agents from different offices/companies. I only worked with 2 of them because they live in my neighborhood, they have been around for many years and are a trusted realtor and mostly because I have known them for yrs. The 3rd one , Well its my Girlfriends mother....So I was kinda forced into that one, LOL. I have had good luck with all of them so far, But I have high standards when it comes to working with Real Estate Agents. There are some around here that if you work with them , You deserve what you get.

    You know I hate when you spend half the week thinking about writing a letter to a late payer, then you finaly deside to write it and then, Just as its coming out of the printer the mail shows up and there is the payment.
     
  8. topsites

    topsites LawnSite Fanatic
    Posts: 21,653

    Well look we all get these customers, try as we might to talk the tough talk, best I can tell you is watch these customers a little more carefully than the ones you're pretty sure about... btw it's not unusual with realtors or any high income type of person, more so if it's just lunch money to them, but it also took me many years to reach that level of comfort and even now I can get nervous quick over nothing, 30 days is about on target to start thinking about it, either way you have to keep track of it.

    There's just no telling, I learned late payers / check bouncers / what have you makes no distinction based on income, my records show this sort of stuff draws an even line across the board, so you never really know for sure.

    Something I learned, and it really varies from one to the next, some you have to watch a little more carefully, that usually fixes it. Funny thing is there's been a time or two when a customer I thought always paid on time actually missed one, but as a rule the method is on target and it works. Welps, guess there's a secret bonus for those who always pay on time :laugh:

    But that's just how it is, those who always pay on time shouldn't ever miss one, most never do, if one ever does it truly is an honest mistake, and this I can live with... It's those who try and try, that you just have to watch a little, home ownership helps in the case of habitual 30-day cases, I get far more nervous with renters.

    Glad to hear you got paid, that always helps.
     
  9. zz4guy

    zz4guy LawnSite Senior Member
    Posts: 901

    Anybody have late payers that actually never pay? When do you start cutting off the service? What types of people are they?
     
  10. HOOLIE

    HOOLIE LawnSite Gold Member
    Posts: 3,981

    For the past 2 years, all new customers pay via credit card of file. I still have quite a few that I invoice, and frankly, they are REALLY becoming a pain in my a**. Where a few years ago they would pay within 7-10 days, now it's 20-30 days. The customers that pay promptly are becoming fewer and fewer...not sure why exactly. It's hard to operate when you don't have good cash flow.

    Pretty much now, any invoiced customer that hasn't paid by the next round of bills, I call them personally and offer to charge it to a CC. And I offer to continue to do so. For the most part people like it. I just think nowadays when you can pay almost any bill online, writing checks is becoming a nuisance for people.
     

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