Commercial Billing

Discussion in 'Business Operations' started by Tn Lawn Man, Apr 9, 2005.

  1. Tn Lawn Man

    Tn Lawn Man LawnSite Senior Member
    Messages: 479

    I would like to know which type of billing has been more successful for you all.

    I currently bill my commercial accounts similar to my residential accounts on a per cut basis. If we cut 4 times in a month they get billed for 4 cuts. If the month has 5 weeks in it and they get five cuts then they get billed for five cuts.

    Likewise, if we hit a flood or drought and miss a week the customer does not get charged for the missed cut.

    I have been considering switching to a monthly bill or a set amount for my commercial accounts. And, put in the contract that the turf will be cut on an average of 7 to 10 days with the exception being drought or extreme rain/wetness.

    By doing this if we hit extreme weather and we cannot cut it benefits me because we get the same $$ amount at the end of the month. However, during the months that there are five weeks (five cuts) then it benefits the customer because we cut one extra time.

    The extra cut does not concern me much because I can figure that into the bid. I am more concerned with how it is received by the client/business owners/managers.

    Does it really matter to them?

    I have had a few businesses actually request a per cut billing system. But, that has been rare.

    What has been your experiences?

    Thank you for your responses.
  2. Brianj

    Brianj LawnSite Member
    Messages: 196

    we bill on a monthly bases here, 39 or 42 puts per year times price divided by 12, my customers know if it rains 3 or more days in a row that i have to just push everything back a week, only had 1 customer complain last yr when hurricanes hit and we missed a week
  3. LwnmwrMan22

    LwnmwrMan22 LawnSite Platinum Member
    Messages: 4,373

    Here in MN, I just bill everything at a flat rate of 22 mowings, then divide by 6, for May - October.
  4. sildoc

    sildoc LawnSite Silver Member
    Messages: 2,925

    40 Cuts per year * my rate. add all other services up(shrubs, fert, weeds, annual color and such) divide by 12 and you are set. sometimes it is 38 cuts sometimes its 42. I figure that there is some leeway for 42 cuts a year and they usually want you there close to 52 weeks a year doing something anyways.
  5. LwnmwrMan22

    LwnmwrMan22 LawnSite Platinum Member
    Messages: 4,373

    Had to run last time, cut my response short.

    Anyways, I would try to set ALL accounts up on set fees, that's the only way you can set your budget.

    It's impossible to have a budget if you don't have a steady income.

    Instead of putting in the agreement, and average of 7-10 days, word it something like you'll keep the grass at a height of 2.5-4.5". This way you're not kept to that exact 7 days.

    If the grass grows, you mow. If the grass doesn't grow, you don't mow because the grass is still 3" tall even after 2 1/2 weeks.
  6. thill

    thill LawnSite Member
    Messages: 245

    We do about the same as BRIANJ ....

    We offer different schedules to our commercial clients so we total the number of cuts, multiply it the trip charge per cut and divide by 12 to get the monthly invoice amount FOR 12 MONTHS.

    On all schedules, we do at least one visit November thru February. There is always something to be spruced up. The clients feel better paying the montly invoice amount during those months when they see us out there freezing our A$$ES off. This certainly helps cash flow during the slow part of the year.

    We do invoice on the first of each month for that month. The terms are net 10 days. We receive payment from about 80% close to the 10th day. The others all pay near the end of the month.

    Hope this helps.

  7. westwind

    westwind LawnSite Senior Member
    Messages: 444

    commercial accounts: all services totaled, 26 week mowing schedule, add sales tax then divide by 8. April thru Nov. payup
  8. LwnmwrMan22

    LwnmwrMan22 LawnSite Platinum Member
    Messages: 4,373

    westwind -

    do you do any plowing too??

    Just wondering if you run your mowing contracts for 8 months, do you have plowing contracts for 4 months? Or do some contracts overlap? How do you work it??

    I run mowing contracts from May - October, then plowing contracts from November - April.

    I did it this way, because the first year I went to contracts, the weather dictaded that we weren't able to start about the second week of May. No one would pay their April bill.

    It usually works out, since I've worded that clean-ups aren't due to be done until May 15th, but this year I'm starting on the 17th of April, which means 2 weeks of work on no money.

    Anyways, back to wondering do you have clients that are paying a lawn mowing bill and a snowplowing bill at the same time sometimes???
  9. Tim Canavan

    Tim Canavan LawnSite Member
    from Houston
    Messages: 218

    We pro-rate our bills like some of the other guys. The amount of visits is "give or take" to us. If we miss because of mother nature or acts of God, it's not our fault. The bill is still the same. Think about it this way. If you miss a week because it rained for 5 days, the grass will be extremely high. It takes longer to cut, edge, etc. You get the picture.

    We bill commecial props at the beginning of the month due at the end of the month. So bill for May on May 1st due May 31st. Most commercial props like the at least 20 day time frame to pay. I have found that they pay bills twice a month, so this helps.

    Good luck.
  10. Equipguy

    Equipguy LawnSite Senior Member
    Messages: 370

    We bill by the month. Number of services don't really matter. All those details are spelled out in the service agreement.

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