higher price for late payers?

Discussion in 'Lawn Mowing' started by bobbygedd, Dec 29, 2004.

  1. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Messages: 10,178

    i'll be sending out new contracts within a month. there are a few late payers i was going to dump, but thought about this instead of dumping them: just like a bank, car dealer, or credit company, HOW ABOUT charging continual late payers A HIGHER FEE for all services, as well as a higher late fee than people who are timely payers? anyone do this, or consider this? personally, i can't tolerate terminal late payers, but for a higher than normal fee, i think i could live with it. for example most of my customers average $30 a mow. i'm thinking of charging later payers like $33. also the usual late fee is 3%. i'm thinking of charging the late payers maybe a flat rate of $15 per month(the average mow bill is now $120 per month). any thoughts?
  2. packerbacker

    packerbacker LawnSite Bronze Member
    Messages: 1,433

    Can you blame them? If i was terminal i wouldnt pay either. Whats the point?
  3. Precision

    Precision LawnSite Silver Member
    Messages: 2,995

    As you know raising rates is the easiest way to weed out clients. But in this case you are win win. They balk at the increase and leave, no more chasing money. If they agree to pay, you have covered your risk and the float on the money. Just be careful with upping the late fee penalty. Avoid your states usuary rates. But I think you also know that.

    BG it sounds like a good idea. My opinion, it never hurts to increase your income without doing any extra work.
  4. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Messages: 10,178

    you are a fool!!! TERMINAL: a land mass surrounded by water on three sides
  5. packerbacker

    packerbacker LawnSite Bronze Member
    Messages: 1,433

    Sorry i thought you were talking about a bus stop
  6. Soupy

    Soupy LawnSite Gold Member
    Messages: 3,125

    Welcome back Bobby :drinkup:

    I raise rates all the time to weed out these people. But it doesn't make you feel any better when you still have to collect.
  7. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Messages: 10,178

    i aint home yet. but, i can't wait to be. i'm using my friend's computer, and it moves slower than ol man ric gettin out of bed in the morning.
  8. Ol'time Lawncare

    Ol'time Lawncare LawnSite Senior Member
    from NJ
    Messages: 497

    Hello BobbyGedd, hows Florida, have you done any boating while there, I,d charge at least 5 bucks more for late payers, thats a good idea, and i'm doing just that this year!
  9. jwholden

    jwholden LawnSite Member
    from CT
    Messages: 218


    I was running that through my mind last week and thought of slow payers pre-pay for my services. How about a contract that states that all services MUST be prepaid. Send the bill at the beginning of the month and don't mow their lawn until you get a check.
  10. Tn Lawn Man

    Tn Lawn Man LawnSite Senior Member
    Messages: 479

    I don't necessarily think it is a good idea.

    This is why.

    Although your late paying customers are a pain, they still may recommend you to a good customer. And that customer may not use your services because they think your prices for their PITA friend are too high, where they may have used you had they known your normal price.

    If it were me I would simply raise the late fees. If they don't mind paying for being late then you have achieved what you want....more money from the PITA to cover the fact that they do not pay on time.

    To use your example of credit companies: what sounds better to you (a good customer)?

    1. 10% interest with 5% penalty for late payments

    2. 15% interest with 3% penalty for late payments

    If I am a "good" customer it is obvious that #1 is the best option. And that is the goal, to attract good customers

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