12 month billing

Discussion in 'Lawn Mowing' started by cutemhigh, Dec 10, 2007.

  1. cutemhigh

    cutemhigh LawnSite Member
    from 44060
    Messages: 30

    I hear a lot of talk about spreading payments out over 12 months, to make the monthly payments easier. I am assuming that these contracts include snow removal? Or is this the mowing season billed over 12 months?
    Seems like that would lose money, because people can and do back out of contracts, and they would be gone, not paying the full amount for mowing, but the monthly average. Does this make sense?
  2. lawnspecialties

    lawnspecialties LawnSite Silver Member
    Messages: 2,524

    I do that with all my residentials but three. Those three have some unique circumstances that makes it more sensible to do them on a "pay-per-cut" basis. But instead of snow removal, mine include all the aeration, fertilizations, and overseeding invloved.

    Since I started in '99, I've never had anyone try to skip out on me in the off-season. Not to say that won't ever happen. But on the other hand, if you figure out your yearly charges for all those services and then even them out by dividing by 12, you'll sell more services since you don't have to hit them with a huge bill one month. Example: a residential paying $200/month versus paying $40/cut plus a $300 aeration/fertilizing/overseeding. That customer doesn't have to pay $460 for that month but they also will be paying the same $200/month in January just like in September.

    Many folks can't or won't budget things for themselves; especially lawn maintenance. By giving them a constant bill every month, you basically budget their full lawn maintenance for them.:)
  3. Grits

    Grits LawnSite Silver Member
    from Florida
    Messages: 2,994

    I plan on using a 10 month billing system next year. It is the same as a 12 month just minus 2 months. It was suggested to me to do 10 instead of 12 by someone that is billing 10 months and it is working great for him.
  4. charmill26

    charmill26 LawnSite Senior Member
    Messages: 369

    why 10 instead of 12?
  5. cutemhigh

    cutemhigh LawnSite Member
    from 44060
    Messages: 30

    i think 12 is good, because it is a win win for everyone..i am impressed that not one single client has ever skipped out. I imagine they all wait until the renewal period or what? Sounds like a great way to retain customers. Especially if you make your renewal time a time that they are NOT getting flooded with other offers. I.E. : JAN 1.
    Thanks for the help.
  6. TheYardBoys

    TheYardBoys LawnSite Member
    Messages: 55

    i use 12 month for two of my commercial accounts. But they pay me for the next year. What this mean; it means that when they pay me at the end of december they are paying for their yard to be maintained during the year of 2008. and this helps both way. It lets them know that i well be there the next year. It helps me know that i have a good paying yard. And plus it gives me some money during the winter.
  7. ed2hess

    ed2hess LawnSite Fanatic
    Messages: 14,574

    You need to go to 12 months you want people to get into a mode of paying you month after month and usually they will do some type of auto pay. You want it to be like the cable bill they budjet for it and pay it monthly.
  8. lawnspecialties

    lawnspecialties LawnSite Silver Member
    Messages: 2,524

    A very good point. I have several customers who have me on autopay. Since the bill rarely ever changes (usually if they want something else), it's a no-brainer and their checks come in the first week of the month.:)

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