How to Collect...

Discussion in 'Starting a Lawn Care Business' started by Capital sn0maN, Jul 16, 2008.

  1. Capital sn0maN

    Capital sn0maN LawnSite Member
    from SW FL
    Messages: 4

    I started my own company back in April, and have been searching for the best way to collect from my customers. Some pay me each time I come, some pay for the month up front... I have tried different approaches, but I would like to know what some of you think about contracts, and different methods of collection. Also, what about getting ones on an annual contract, so that I am able to collect steadily through the winter months... any ideas?

    I look forward to reading what you have to say, and if you have any further advice, it is welcome. Thanks.
  2. billslawn89

    billslawn89 LawnSite Bronze Member
    Messages: 1,365

    i have all my clients sign an agreement that explains my duties, the price and billing date, then if payment not received, than a late charge will be added..funny, a few didn't pay on time, got the late charge, paid on time ever since. i always explain every little detail of my job duties so the client can't come back to me and complain! works all the time and the way it should be, never take things for granted!
  3. MrBarefoot

    MrBarefoot LawnSite Senior Member
    Messages: 515

    BillsLawn89 is right on target with the service agreement.

    If you do weekly maintenance, then you should have a service agreement, which spells out the all terms, including how you get paid and the finance charges for paying late, and consequences for non payment.
  4. Green Finger

    Green Finger LawnSite Senior Member
    Messages: 839

    Starting out it is best to get at lease 90% of your customers paying you at the door. When services are completed. Get your money asap.:nono:

    Implementing this policy will help you down the road and as you grow. It will you maintain a positive cashflow. Stop you from having to borrow money.

    this is how a lot of companies go under because on paper they are making the money but they can't see it. Cash flow problems.
  5. fool32696

    fool32696 LawnSite Senior Member
    Messages: 993

    Green Finger, I used the pay at time of service method until last year. Didn't work at all for me. If you hit 16 lawns on a particular day, how long do you spend dealing with each one? If you can keep each old person to rambling for only 5 minutes, you still blew almost an hour and a half of your day. What do you do when you're not there and have a crew handling the account? I dropped all of my needy clients that wanted to BS and have gone to email/postal billing and don't regret the change at all. You don't need to be dealing with customers when you're covered with grass anyways.
  6. MowHouston

    MowHouston LawnSite Bronze Member
    Messages: 1,012

    Here's how mine works. Keep in mind, I do all of my marketing online.

    Customer finds my website. Browses our prices, service area, etc. If they are into it, they go to a form to fill out an estimate request.

    At the bottom of that estimate request, it states:

    "By hitting "submit" below, you are stating that you have read, understand, and agree with our Terms of Service."

    "Terms of Service" is of course directly linked to our ToS page for the customer to read.

    At this point, if they hit submit, they have just agreed to our ToS regardless as to whether or not they have read it.

    Now to the collecting. As soon as we have responded with a price for service and the customer wants to get serviced, we call them and get their billing information: Debit/credit cards only. I have two customers that pay by check, in advance, and they are both law firms.

    From there, they are on the routing and we bill their account the day following service. At/around midnight, those funds are deposited into our account. Boom. Doesn't get much faster than that.

    Granted, there are fees involved with processing credit cards, but its much better than dealing with the headaches of late payments, non payments, bounced checks, etc. And 2.1% isn't very bad at all.

    We have no late fees. If a card doesn't process, we call the customer for another card and cease service until we -can- process it. If 30 days go by with no resolution, $30 is added to the bill and sent to our collections lawyers.

    This keeps us from accruing some stupid $300 bill and really getting the shaft from non-payment. Only had to use the collection lawyers once and that was before we accepted credit cards, billing monthly at the time.

    Not sure if all of that helps you out but it is one of the many methods of getting your moolah!
  7. Capital sn0maN

    Capital sn0maN LawnSite Member
    from SW FL
    Messages: 4

    Well, I am not really far enough along to warrent starting online bill pay with my customers. At this point I don't even have a full weeks worth of work (yep, I'm a rookie), so collecting from my customers at the time of service is not so much an issue. Most of them just leave a check or cash in an agreed upon spot for me the day I am to come. I don't know if this is permitted, but if anyone has a draft of something they use for a service agreement it would be MUCH appreciated if I could look at it to get some ideas. If you don't mind shoot a quick email when you get a chance.
  8. Charles

    Charles Moderator Staff Member
    Messages: 8,761

    Do excellent work and charge a fair market rate price. I collect in person on late payers. Be clear about your job parameters and when you will be paid. I have never used contracts, but they are preferrable
  9. crazyman

    crazyman LawnSite Member
    Messages: 13

    i send bill out on last day of month. Asking for payment of services for previous month. To be due on 10th if not paid they recieve a 10 percent of balance late fee. Works great for me
  10. bohiaa

    bohiaa LawnSite Fanatic
    Messages: 5,220

    I too send out invoices on the last day of the month and it's due on the 10th.

    I hanevt charged a late fee yet, But I have waived late fees a couple of times, and like Charles said in person, however this last week I have had to play the bad guy, and it looks like I'm fileing tomorrow on 3 customers,,, MAN I hate doing this

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