Customers that don't pay

Discussion in 'Business Operations' started by scott's turf, Oct 29, 2001.

  1. scott's turf

    scott's turf LawnSite Senior Member
    from NH
    Messages: 949

    I have been in the business for about 10 years now. In the past I had only done residential work, but this year I was a sub contractor mowing in a condo developement. I got paid weekly the from the guy throughout the summer, then weeks went by before I got paid again but I always got paid untill now. I am owed a little over $2000 now and everytime I call the guy he is really nice and gives me the "check is in the mail" routine, but it never is. The last thing I want to do is go to small claims court but then again I need this check. Do any of you have a tactic or letter that you send out to employees that don't pay that threaten them with a law suit? Does it work?

    Thanks for your help.

    MATTHEW LawnSite Senior Member
    from NE OHIO
    Messages: 665

    You need a letter written in a FORM style, not a personalized letter stating that outstanding balances beyond 60 days will be sent to a collection agency or small claims court. This is business. Maybe they are behind on their bills and cannot afford to send it to you, but when they are allowed to do that, YOU find yourself in the same situation with your bills.
  3. Island Lawn

    Island Lawn LawnSite Senior Member
    Messages: 632

    certified mail sometimes gets attention
  4. lbmd1

    lbmd1 LawnSite Senior Member
    Messages: 462

    Hey Scott,
    I find the best approach is dropping by un-announced for a face to face. In about 7 years of being in business now, I 've only had about 8 deadbeats. After the initial rounds of letters\phone calls, I try to stop by their home (if residential) on a saturday night around 8:00 to collect in person. I am batting 1000 when it comes to this method. It's hard to say no or run away from your lawn guy when he knows where you live. Go see the guy at his place of business and don't leave without some form of payment. Embarrassment of unpaid debt is something that most wil try to avoid at all costs. Whereabouts are you in NH? I'm over in Rye by the coast.

  5. scott's turf

    scott's turf LawnSite Senior Member
    from NH
    Messages: 949

    Thanks guys. I have showed up at customer's houses before and I agree that this works great, the problem is that this guy lives about 40mins away so I would hate to show up and no one be there. I called again last night and I was assure the check would be here by tomorrow. So we will see. Have any of you used a collection agency in the past? How does it work? And how much does it cost.

    Mike, I live in Derry by the way.
  6. HBFOXJr

    HBFOXJr LawnSite Bronze Member
    Messages: 1,712

    I've used the collection agency before with mixed results and higher costs than small calims court. Don't be afaraid of small claims. It is easy and pretty fool proof and you get you extra costs of collection.

    You should have cut him off earlier.
  7. SprinklerGuy

    SprinklerGuy LawnSite Bronze Member
    Messages: 1,778

    Search for my thread....lawsuit and the posts that follow that thread. Prevention is the best...........suing sucks.
  8. scott's turf

    scott's turf LawnSite Senior Member
    from NH
    Messages: 949

    HBFOX. I would have cut him off earlier but I was his sub for a big condo deal and that was only 4 mowings, a months work. He had paid me at the end of the last month so I didn't think that there was a problem.
  9. wolfpacklawn

    wolfpacklawn LawnSite Member
    Messages: 120

    For residentials I would put a lein on the property. I always get right on anyone paying late and always stress the importance of prompt payment when I initially meet with a new customer. I stress to them that my payment is due upon receipt and that I expect to see payment within 10 days of my sending out their statement. I have had real good success with this and have only had to write off $125 as bad debt in the last 2 years.

    As for commercial accounts or sub-contractors I don't know how to best deal with them but I would talk with my lawyer and get some legal advise. I think that you can recoup your legal fees with a judgement. I will no longer do these accounts for a variety of reasons but one of the main ones is that I found that my big commercial accounts were always late to pay and a real pain in the neck to deal with. This was particularly hard on me when these commercial accounts represented such a large part of my gross receipts. Like I said, I have refocused my business plan and no longer will do any large commerial accounts.
  10. Stonehenge

    Stonehenge LawnSite Bronze Member
    from Midwest
    Messages: 1,276

    The more I get to know people who were born and raised in WI, the more I hear of 'Farm Justice' when it comes to bill paying.

    We just finished a project for a guy who has a real knob for a neighbor, and was telling me about how the guy had hired an excavation company build the road they lived on (this guy developed the land), but wouldn't pay.

    Finally, the excavator company got 2 combines, went out into this guy's acreage and harvested ALL HIS CORN. Called him up and told him - "You want your corn? Gimme my money!"

    I guess the bill got paid right away...

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