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Gas prices on the rise...... AGAIN!!

Discussion in 'Business Operations' started by hairbearxx, Apr 25, 2011.

  1. hairbearxx

    hairbearxx LawnSite Member
    Messages: 69

    Well here we go again, just like we did in 2007 and 2008. Gas is going to be REDICULOUS again, and nobody in Washington is going to care, so we have to fend for ourselves. I'm planning on implementing a fuel surcharge. Any ideas on how I should do it and how much it should be?
  2. GreenI.A.

    GreenI.A. LawnSite Silver Member
    Messages: 2,131

    I'm adding one on starting my third round of fertilizer. I am putting a note about it onto the invoice for each customer during round 2. I am not listing it as a fuel surcharge but saying in the not that due to increase in supplies and overhead cost our price is increasing slightly. I am also not putting a percentage or a total yearly increase on it, I am simply saying your service will increase $xx.xx per round. If a customer calls and has a problem with it, I may keep them at their price.
  3. tradeyouraccounts

    tradeyouraccounts Banned
    Messages: 343

    Could use this as a template

    Dear Customer:

    First, we would like to thank you for being a loyal and valued customer. Rest assured, we will continue to provide you with the best quality service available in your area, and we shall always be available to assist you.

    We hope you understand that since “Date” we have been absorbing the rising cost of equipment, Supplies, liability insurance, licenses, and gasoline which have gone up over 50%, we are forced to increase service rates to $amount per month from “Date”. Even with all the increases we have had to endure, we are dedicated to keeping your service rate as low as possible. We appreciate your understanding and your loyalty.
    Again we want to thank you for being a great customer. We will continue to provide you with the best quality service available in your area. Please feel free to contact me at any time with any questions you may have relative to our service provided.
    Please remember if you refer a customer to our company after their 3rd month of continued service you receive a month’s service at half price.

    Yours sincerely,
  4. GreenI.A.

    GreenI.A. LawnSite Silver Member
    Messages: 2,131

    ypu and like you did stress that all costs are rising and just mention fuel, otherwise when fuel does go down alittle they will be expecting their price to drop even though most things wil not go back down. Water, electricity, empoyee pay, all goes up and very realy goes down.
  5. hairbearxx

    hairbearxx LawnSite Member
    Messages: 69

    Thanks for the tips, guys. I think I am going to wait until the end of the round to start it up. Not looking forward to it AT ALL!! Anybody else going to do it this year??
  6. Dr.NewEarth

    Dr.NewEarth LawnSite Bronze Member
    Messages: 1,476

    I've had the provision for a surcharge in my contracts since the last big increase a few years ago. It just kicked in.

    Even though one of my hoa's has signed the same contract
    this year and previous years, their property manager deducted the gas levy from their total for March and won't discuss it.
    It appears that the association president isn't backing me up either. I'm worried about this one. I can't afford to walk or litigate, particularly so early in the season.

    Residential clients already have the increase built in to their cost with no levy to be included afterwards. There has been some grumbling about prices there, but no problems getting paid yet.

    This year is starting out to be very stressful with all of the games, late payments and non-payments from my big clients.

    Can I still get an Irish sweepstakes ticket?

    Actually we have lotto 649 and lotto max to waste our money on
  7. hairbearxx

    hairbearxx LawnSite Member
    Messages: 69

    bumpin for anymore ideas?
  8. GreenI.A.

    GreenI.A. LawnSite Silver Member
    Messages: 2,131

    Posted via Mobile Device
  9. Dr.NewEarth

    Dr.NewEarth LawnSite Bronze Member
    Messages: 1,476

    $5.50 a gallon today

    I let some of my sites grow an extra week without cutting. Only a trim and site inspection was carried out. I'll cut a half inch higher next week too.

    In particular, the one site is pesticide free and we have to allow the Fiesta to work.
    So their lawns length is helping to choke out the weeds.
    They'll complain. Every-one wants the pristine golf course....NOW!
  10. WheatBookkeeping

    WheatBookkeeping LawnSite Member
    Messages: 108

    Fuel surcharges

    The manner in which you calculate the fuel surcharges is strictly a business decision you make as owners. Use percent of sale, use mileage, use fuel price as an index, use what ever logical method you decide.

    For bookkeeping purposes, the surcharges are considered an increase to your operating revenue because they offset an increase in operating expense. The surcharge is part of your gross income. If you want to record surcharge amounts separately from your other sales revenue you can certainly use a dedicated revenue account. It all gets rolled up to your Gross Revenue.

    For sales tax purposes, the rule is that the surcharge “follows” the service being performed. i.e., if the service being performed is taxable the surcharge is taxable. If the service is not subject to sales tax the surcharge is also exempt.

    If your customer is put on notice that a “new” fuel surcharge is going into effect, they may want it itemized on their invoices - commercial customers especially. Once the surcharge is “out of the closet” and showing on the invoice, it may put you at a competitive disadvantage.

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