[LawnsharkMB]

I have a commercial account that represents roughly 9% of my total gross but about 19% of my year round client's income that is always 2 to 3 months behind on payment. Thinking that they should get the axe for Christmas this year.....

 

[Hvlc]

I cut services to all slow paying clients.

 

[LawnsharkMB]

I cut services to all slow paying clients.

how do you define a slow paying client?

 

[Hvlc]

how do you define a slow paying client?

anyone that runs past 30 days frequently and takes multiple efforts to collect from

I had one tell me he waits 90 days for payment from his clients and I'll get paid when he does. I waited for my final payment and discontinued service

I expect most commercial clients will take 30 days, I build that into my margin. Residentials are another issue, I'm not a collection agent.

 

[DMT29]

how do you define a slow paying client?

30 days for me.

 

[SilverPine]

45 for commercial isn't unheard of. We deal with a management company whos minimum is 45 and sometimes longer. The trade off is they have to pay a bit more than everyone else. Its not terrible for maintenance, but it sucks waiting for construction money.

 

[Mike NY]

I worked for a commercial/Industrial customer for over 15 years. always paid 90-120 days.







They were never late once, paid 90-120 days as agreed!

 

[Dr.NewEarth]

Every-one, please, go search your individual State/Provincial laws. Always use a written contract.....A handshake isn't worth the paper it's written on...... I've incorporated the average cost of filing a "builder's lien" (attorney, filing fees, etc.) into the annual over-head for the company. Historically I've experienced that there will be one flaky property manager or hoa that doesn't pay on time, or withholds payment for some strange reason. The recession hit Vancouver in 2011, after our Winter Olympics boom. I have never seen so many accounts go into default. In British Columbia we have a maximum of 45 days from the invoiced date to file a lien for non-payment. (and we cannot charge interest, lien costs or legal fees back to the client. ouch.) Regardless of where you are, if you don't have a written contract you can't file a lien or even go to small claims court. Peace. PS, keep in mind, you will be on the property management companies "merde list" and will probably be blacklisted by them if you have to exercise your legal rights. Ramble over.

 

[snomaha]

I have a commercial account that represents roughly 9% of my total gross but about 19% of my year round client's income that is always 2 to 3 months behind on payment. Thinking that they should get the axe for Christmas this year.....

Greg Crabtree has a slide deck showing how long it takes to get cashflow positive based on:
Service based business
10% true net profit
40% combined state and federal income tax
Bill for monthly services at the end of the month with net 45 terms.

You aren't cash flow positive until 34 months in the above scenario.

 

[Youngandfree]

I have a commercial account that represents roughly 9% of my total gross but about 19% of my year round client's income that is always 2 to 3 months behind on payment. Thinking that they should get the axe for Christmas this year.....

Is this client paying as they said they would, or do you require payment at time of service and they are always that late?

 

[LawnsharkMB]

Is this client paying as they said they would, or do you require payment at time of service and they are always that late?

There were no payment terms in the original agreement. I bill on the first of the month for the month of service. For example right now the bill that went out October 1st for October service has not been paid and it's December 2nd. All of my other commercial properties are billed the same way but pay within a week or two.
It seems to me like I will never be caught up on this account. It's always going to be a couple months behind. From a business standpoint it seems like I'm never going to be profitable.

 

[ztman]

Time to pick up the phone. They may think you have no problem with the way they are paying

 

[Andrew H]

In my experience, the larger the company, the longer they take to pay.
There’s a guy around here that services a Ford plant and doesn’t get his first snow check until like June.
45 days isn’t that bad honestly.

 

[Youngandfree]

There were no payment terms in the original agreement. I bill on the first of the month for the month of service. For example right now the bill that went out October 1st for October service has not been paid and it's December 2nd. All of my other commercial properties are billed the same way but pay within a week or two.
It seems to me like I will never be caught up on this account. It's always going to be a couple months behind. From a business standpoint it seems like I'm never going to be profitable.

So do you confirm payment terms now with clients?

There's a guy in my area that does a ton of work for this old rich dude that has a bunch of property. Old dude is racist and a PITA. But pays top dollar even though he is 6 months paying. This guy just knows that is the deal and isn't depending on that guy's check to eat and factors it in. It's worth it to him to keep the guy's business.

 

[ShowCaseLawnCare]

I get paid same day can’t beat that !!

 

[Toro44]

As long as the terms are agreed upon I don’t care, but if I have to chase someone for money they can find someone else. I’m not a finance company, I’m a service company.

 

[Andrew H]

I get paid same day can't beat that !!

Yes you can, pre pay...

 

[Skol]

Yes you can, pre pay...

I actually don't like being prepaid. There's always a part of me that feels like I'm doing it for free when I get to the job site. :laugh:

A lot of my commerical stuff is around 45 days.... It doesn't bother me.

 

[Andrew H]

I actually don't like being prepaid. There's always a part of me that feels like I'm doing it for free when I get to the job site. :laugh:

A lot of my commerical stuff is around 45 days.... It doesn't bother me.

Thanks Herbie...

 

[MowDaddy]

There were no payment terms in the original agreement. I bill on the first of the month for the month of service. For example right now the bill that went out October 1st for October service has not been paid and it's December 2nd. All of my other commercial properties are billed the same way but pay within a week or two.
It seems to me like I will never be caught up on this account. It's always going to be a couple months behind. From a business standpoint it seems like I'm never going to be profitable.

We do a large senior living center, they always eventually pay, but once they 60 days out I start adding 1.5% late fee on balance due, then each month after that keep adding interest on the growing bill.