1. Missed the live Ask the Expert event?
    Catch up on the conversation about fertilization strategies for success with the experts at Koch Turf & Ornamental in the Fertilizer Application forum.

    Dismiss Notice

I AM switching to year round billing this year. Thoughts?

Discussion in 'Business Operations' started by crslolbkr, Feb 5, 2013.

  1. crslolbkr

    crslolbkr LawnSite Member
    Messages: 48

    I am currently writing a letter to all customers informing them that I will be using a year round billing system as the new standard for billing moving forward.

    The main hang up for me is the number of services to charge for. I have seen two other company's contracts and they both used 28 mows as their basis for pricing. Does this sound right to you?

    I have always billed monthly at the end of the month so I've never been worried about mowing when grass isn't growing just to say I mowed 28 times. My customers average about 22 mows per season. How many mows do you guys perform per customer per season?

    Also any ideas, thoughts, suggestions, things to be aware of or whatever on year round billing are welcome.
  2. Curcioslawn

    Curcioslawn LawnSite Member
    Messages: 34

    I thought about doing this as well, my only worry what happens if I lose a customer to say moving or divorce etc... how do you get the money then?
    Posted via Mobile Device
  3. cps

    cps LawnSite Member
    Messages: 110

    First I think we would need to know why you are thinking of switching to year round billing.

    I have a major concern with stretching seasonal lawn care payments to year round payments is how do you plan on handling that customer that decides to stop paying after the season is over. Basically he received quality service for half the price and now you have to send out late fees, chase them around for payment and possibly end up in small clams court. You better have a good lawyer put a clause in your contract to make all that running and headaches around worth your while.. Id rather keep it month to month with a Net 30, that way if they decide to quit paying im only out a month, not a half seasons worth of work!

    I'm here in NY and I'm sure that our growing season is a little different. We offer seasonal contracts that are made up of 14 biweekly visits or 24 weekly visits (like you said, you will have weeks that it should not be mowed). We include a Spring cleanup and a Fall cleanup, add tax and divide it into 8 monthly payments (the extra month helps cover bills from Nov-Dec until it snows).
    We also offer annual contracts, we just add the cost of snow removal to the lawn care agreement and split it up into 12 monthly payments. I'm sure there are better methods but this is what has worked for us..
  4. CircleC

    CircleC LawnSite Senior Member
    from NW
    Messages: 309

    You need to consider who you are putting on year round billing. You never know who you are going to loose and who is going to stiff you.

    Are you in a year around market...
    Are these customers full service (trimming, ferts, spring/fall clean up)...
    What are you going to do in Fall/Early Spring when its hard to collect....

    I do a level payment system for all of my full service customers. People who are mow only, I bill them at the 1st of the month. I only do the level payment system from March 1 to December 1 (for residental customers, commercial are 12 month). Im even considering billing from March to November, sometimes payments are slow in December. Its a busy time for most people and they dont even think about lawn service when its 30 out.

    However.....when I did go the the lever payment system people really liked it and where willing to spend more money when they knew they had a set budget per month.

    Good Luck....
  5. NC Greenscaper

    NC Greenscaper LawnSite Senior Member
    Messages: 446

    We offer full service lawn maintenance that is billed 12 months.

    Basically we add all the anticipated mowings per year (weekly or biweekly).
    Pruning cost for the year
    Fertilizer cost for the year
    Herbicide applications for the year
    Leaf clean ups
    mulching if applicable.

    Add all the services and divide by 12.

    However, like others have said if we are just mowing during the growing season then they pay as they go.

    Just a note. 1/4 of our customers are full service and they account for a little over half our maintenance revenue. They are generally the most happy, always pay first and their properties look the best.

    So I haven't decided yet to stop doing mowing only customers, but I have been thinking along those lines and I always try to convince new prospects to go full service.
  6. Efficiency

    Efficiency LawnSite Bronze Member
    from zone 6
    Messages: 1,808

    If you switch all to this, youre going to have cash flow issues worse than you do now
    Posted via Mobile Device
  7. CLS_Birmingham

    CLS_Birmingham LawnSite Member
    Messages: 128

    We take all the costs for services, growing season, leaf season, non-growing season, pruning, weed control, ect. add them up and divide by 12.

    A good way to approach existing customers, is to offer it as a "budget billing option". Depending on your clients, many of them may like the system, and choose to go with it. As you talk with them, try to sell them on the idea of it. Just don't force them to go into it. As for your new clients, I would only offer year round billing. Through the years, we've transitioned almost all of our clients to year round billing. Though we still allow the existing per cut clients to continue being billed this way.

    No use in losing loyal clients over it.
  8. crslolbkr

    crslolbkr LawnSite Member
    Messages: 48

    A lot of good points. I will definitely be pushing year round as a strong preference at first. I agree with CLS_Birmingham that I don't want to lose good mowing customers over it. About half of my customers are full service. These will - like a few of you pointed out - be the customers who are most likely to buy into the system right away. Efficiency, thank you for your input. Would you mind expanding on your thoughts a little bit. I am not a great business man to be completely honest. Some explanation or examples would help me understand a little better.

    Thanks for your thoughts so far guys
  9. crslolbkr

    crslolbkr LawnSite Member
    Messages: 48

    Again, if anybody has keeps record of their average mows per season I would like to hear what they are. Is 22 to 24 closer to what the rest of you are hitting.
  10. Roger

    Roger LawnSite Fanatic
    Messages: 5,943

    The number of cuts is highly dependent upon your area. I hope to get 32 cuts from most of my customers.

    If you know that 22-24 is your norm, but intend to use 28 as your basis for an annual charge, why wouldn't the customer drop your services? Why would they pay for four added cuts? How will the customer feel about paying their bill in January, when you have not been on the premises for 4-5 weeks? Or, when snow has been on the ground for most of the previous month?

    I think somebody asked early in the thread of "why." Without answering the question directly, I think you hope to get paid for 28 cuts, when you probably only need to provide 22-24 cuts. Is that correct? Or, is there some other explicit undisclosed reason?

    Several posts here have explained how they do their annual billing. But, I see they are in regions where services are provided year around, or nearly year around. Is Dayton, OH such a place?

Share This Page