can I change my due date?

Discussion in 'Business Operations' started by JHLC, Apr 25, 2008.

  1. JHLC

    JHLC LawnSite Member
    Messages: 147

    I want to get some opinions on changing the due date on my invoices. I currently bill on the 1st for the work done the previous month. Payment is due on the 15th, they get a late fee on the 20th, and service is stopped until payment is received after the 30th. I think I give them way too long to pay as it is now, and some still cant get it paid on time. I was thinking about mailing the invoices out a few days earlier, maybe the 25th, and make the due date the 10th. I will stop service if payment is not received by the 10th. I think the tall grass will get the payment in faster than the threat of a late fee. The only problem I see is that the first month I change to the new system they will get a bill on the 1st and the 25th of the same month. Has anyone done anything similar before? Had any problems? Did they get mad or did they understand?
  2. bigcountry01

    bigcountry01 LawnSite Member
    Messages: 136

    i totally agree with you. i have alot of customers that drag me out untill the end of the month and i also bill on the first. Its a killer for cash flow. I have been putting due upon receipt but for this month i am putting a due date. Its gone on too long.
  3. J&R Landscaping

    J&R Landscaping LawnSite Fanatic
    Messages: 5,095

    I bill everything out the same way. Yes it can kill cash flow. I've thought about only giving a 7 day window but we'll see.
  4. DistLawns

    DistLawns LawnSite Member
    from Midwest
    Messages: 120

    The problem I would have if I stopped cutting for a late payment is this:
    The grass would be so long when they did pay it would take me trice as long to cut.
    If I charge extra money for the long grass, I garuntee I would lose customers, to much competion that wouldn't charge a fee.Even if I do charge double for the long grass, all I've done is broke even for the weeks I didn't mow so to cancelations.So now I have more work for essentialy the same pay.I've found that customers that don't pay on time will if you start calling them. Then you get paid, and you keep your next months billing in tact. With all that said, People just need to pay on time.
  5. mdvaden

    mdvaden LawnSite Bronze Member
    Messages: 1,946

    My type of work seems to bring payment upon completion, and that's what my project contracts state. Usually, the customers are home too. A lot of one day or week long work.

    But my late fee starts if the payment comes more than 10 days after the work is done.

    If I was doing your type of work, I think I'd send the bills out to arrive on the 20th, with the payment due by the 5th, and late payment on the 12th - one week buffer.

    Because in one way, they should probably pay you mid-month, for the month you are working. That's a 50 / 50 matter of fairness. For two weeks you are on the down-side, and then they would share two weeks on the down-side. But since you are willing to assume all 4 weeks on the down-side, I'd suggest what I wrote. At least that's the schedule I'd use.

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