Year round customers cancel

Discussion in 'Lawn Mowing' started by 021462, Feb 3, 2005.

  1. 021462

    021462 LawnSite Member
    Posts: 97

    I have had several year round customers cancel in the winter when I am supposed to be making my money back from them. I am begining to wonder if going to billing them monthly isn't the better way to go. You know what I mean, I set them up on a flat monthly charge for 12 months. Everything is fine during the mowing season when you see them regularly but, when the off season rolls around they call up and cancel and you lose money. I doesn't happen alot but enough to make me consider only offering a monthly billing cycle. Anyone else have this problem?
     
  2. I would think a properly worded contract would stand up in court and you could get the difference?

    40 cuts at 40 each for a grand total of 1600 bucks.....133.33 per month right?

    you cut for 9 months at 133.33 per month...reality is they only paid 1200 bucks for 1600 worth of mowing.....any judge would rule with you IF your contract was worded properly.

    Wouldn't they?
     
  3. geogunn

    geogunn LawnSite Gold Member
    from TN
    Posts: 3,010

    sir--I am sure it is just me but I don't have a clue what you are talking about.

    how are you supposed to be making money "back from them"?


    and what's up with this:

    can you further explain?

    GEO :)
     
  4. scottt

    scottt LawnSite Senior Member
    Posts: 269

    I agree with SprinklerGuy. In our contracts it states that if the customer cancels we will either give them a refund or they will owe us money, depending on how much work we performed prior to the cancellation date. This makes it fair for everyone involved. Your customers are being smart in cancelling before the year is over. Try to contact the customers who cancelled and explain you already performed work you're not being payed for. You can't force them to pay if it's not in the contract, but you may get lucky.
     
  5. DennisF

    DennisF LawnSite Bronze Member
    from Florida
    Posts: 1,381

    That's why I charge by the cut and not by the month. If the price is $25 per cut and they get 4 cuts per month then the monthly bill is $100. If there is a 5th cut during the month the bill is $125. In the winter if no service is received no bill is mailed. Simple and straight forward billing. They only pay for the service they receive, and I get paid for the work performed.
    I know some LCO's like the steady flow of revenue by billing the entire year, but it's too easy for a scumbag customer to quit and leave you with a loss. You can try taking them to court, but the cost of trying to collect is usually not worth the trouble.
     
  6. lawnman_scott

    lawnman_scott LawnSite Fanatic
    Posts: 7,547

    I think he means he did all the work in the hard hot cut every week months, now in the easy months people dont want to pay and he is thinking of just charging every month for what he does that month. I would do it that way, but I cut every 2 weeks even in winter, so I dont have too many problems with it.
     
  7. Wolfie's L&L

    Wolfie's L&L LawnSite Member
    Posts: 211

    Cutting grass in the winter months must be popular for you guys, I never see anyone around here cutting in December, January or February :p
    How many of you guys get complaints from customers about you "cutting when it doesn't need to be"? Seems kind of strange to me...


    Jason
     
  8. 021462

    021462 LawnSite Member
    Posts: 97

    geogunn,
    lawnman_scott has it right. Let me try to explain........in the summer I will cut a yard on average 4 times a month. I base the year round contract on 40 cuts per year. If I charge $40.00 per cut at 4 cuts a month that comes to $160.00. On a year round contract I take $40.00 X 40 cuts which comes to $1600.00 per year divided by 12 months equals $133.00 per month. So, on a average month during the peak mowing season I am losing $27.00 per month. During the winter I get that money back. Does this explain my siuation?
     
  9. Randy Scott

    Randy Scott LawnSite Bronze Member
    Posts: 1,915

    Learn to budget your money and get paid for the work when it's completed. Are you charging finance charges for carrying their balance for a year? That money they owe you could be in a savings or IRA or wherever, but it should be in your hands. We have monthly contracts for mowing and we get money a month in advance and the final payment is received about a week after the final mow. No way I am letting them hold my money any longer. I'm not a loan institution. Steady cash flow is nice, but not when it costs you money. It's hard enough to make profit in this business and then to have that eaten up by poor contracts or free financing to people.
     
  10. ProSvcs

    ProSvcs LawnSite Member
    from MD
    Posts: 84

    012462,

    I will be offering a 12 month bill cycle this year, but only for full service customers. I will include mulching, pruning, Spring / fall cleanup, and Snow / Ice management.

    I will collect 50% upon contract signing for Mulch / Salt (This will pay for material).

    The contract reads

    • A 30-day written notice of cancellation is required by Pro Services. If this notice is not received, the client is obligated to pay for services through the end of the billing cycle in addition to any other charges that may apply. You have elected Pro Services annual agreement which reduces the monthly payments for all services. This also spreads the payments over the winter months when not much work can be performed. Upon cancellation, all fees and services performed to date will be tallied up. A 10% early termination fee will be applied to the balance owed at time of cancellation. All fees are due within 5 business days of cancellation. Any collection costs including attorney fees and court cost will be the responsibility of the client.

    If anyone can see any holes in this, please let me know.

    Jim
     

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