I have a problem collecting my money!

Discussion in 'Business Operations' started by Ramster2000, Mar 22, 2002.

  1. Ramster2000

    Ramster2000 LawnSite Member
    Messages: 12

    I have a problem collecting my money from my customers and I know it is because of the system I have. My collecting system consist of me knocking on the door when I am finished. This type of system worked when I was a relatively small company. Now that I have grown into a larger business I need to get a new system of collecting my money. I want to send a bill to my customers, but the thing is that most of them are my neighbors and are in walking distance from my house. So I don't want to waste money on stamps, but I need to do something different and more convenient. I also don't want to lose contact with my customers because I have been personal with them since the day I started back when I was 15 years old and that seems to have gotten me a lot of referrals. I started with 4 customers my first year and 3 years later I have about 30 steady customers. I don't advertise at all, my only advertisement is by word of mouth.

    Well anyway now that I am 18 with my landscaping business growing and me going to college, a respectable college too, I am finding it harder to collect my money. So any suggestions about how to make it easier for me and my customer please let me know. Thank you to all in advance.
  2. John Allin

    John Allin LawnSite Bronze Member
    Messages: 1,488

    You, my good man, are to be commended. Starting at 15, now 18, going to college and still running your business. I've read stories about guys like you, who end up being incredibly successful at their business. I hope you can continue on the path you have been. Please don't think that once you graduate, that you have to give up the landscape business to get "a real job". You can do well at this, especially given your attitude.

    You are experiencing "growing pains", IMO. Don't consider stamps as wasted money, but as a cost of doing business. If necessary, raise your pricing $2 per visit to cover the added cost of the postage and envelope. It won't cover your time to do the invoicing, however with a simple record keeping program you'll be better off in the long run once you can start tracking what you are doing.

    You will wait for your money though, as standing there collecting gets you the dough much, much faster. However, if you send bills and then go to the door once a month, you'll have saved yourself 3 visits - but will still get your money relatively quickly. You'll find that a portion of those customers will just send you the money anyway. Use 'net 10 days' as your "terms", but still visit once a month to collect. That way you'll still have personal contact with them.

    Just suggestions, not Gospel.

    Best of luck to you. Go Get 'Em !!!
  3. LawnLad

    LawnLad LawnSite Senior Member
    Messages: 738

    Tell them for their convenience, you're going to give them a monthly statement. You can still drop it off on your last service visit of the month or walk them around to each neighbor. If they're home, talk to them and maybe they'll pay you on the spot. If not, leave it for them. Net 10 days. Set up specific terms and hold to them. Even if that person has been your customer for 5 years - if they don't pay you in a timely fashion, you can't live. They have to understand that, and if they don't, they don't care about you no matter what you think. You're in business... you must be paid. You set the terms.
  4. John Allin

    John Allin LawnSite Bronze Member
    Messages: 1,488

    By the way...
    Lawn Lad, whattaya doin up at this hour??
    Is it snowing there??
  5. LawnLad

    LawnLad LawnSite Senior Member
    Messages: 738

    It snowed yesterday (Thur) afternoon from about noon till 3:30 with anywhere from an inch to two of accumulation - if the ground were colder, about 4" would have stuck. We didn't plow residentials since it was going into rush hour and it was right on the 2" trigger depth. Figured we'd check 'em tonight since we saw drifts, etc. And, after 2 hours of driving around, nothing to plow. Warm pavement melted 90% of the snow. Just deicing on the commercials to do. Waiting a little longer before I go out to see what happens with the predicted 1-3"... we keep getting scattered flurries.

    And you? Disappointing morning?
  6. John Allin

    John Allin LawnSite Bronze Member
    Messages: 1,488

    No plowing. Just salting.
    Weathermen screwed the pooch again, although now that I've said that the heavens will probably open up.
  7. goodbeus

    goodbeus LawnSite Senior Member
    Messages: 392

    I keep an invoice pad in the truck...on regular clients who pay by the visit, if there is no check, I'll write an invoice for the work done, the price, and my mailing address....then I'll stick the invoice on the door...the client mails in the bill....I've been doing this for years and it works well...hope this helps, good luck...
  8. ceaman

    ceaman LawnSite Member
    from Indiana
    Messages: 131

    Its like praise from the gods...... take any advice given by Mr. Allin!
  9. Charles

    Charles Moderator Staff Member
    Messages: 8,954

    I tell ya buddy if my customers are home and they have the money after I get finished with the job. I am going to walk straight to that door and get it. Haven't you read about all the collection problems LCOs have? Go search lawnsite about this subject and that will keep you busy for the next 6 months lol But if you must then send them a bill and it will sit around collecting dust until you show up at the door.......
  10. wayne volz

    wayne volz LawnSite Member
    Messages: 49


    A monthly service agreement with a monthly billing will really help you. When we first got into this business we knocked the doors also. The customer contact was good, but the lost production was bad. Spending 10 minutes with each account when finished translates into many lost hours of production over the season. I know that you must have personal contact after the sale, but look at how much time you are not using to your benefit.

    An equal billing sent out on a monthly basis to your customers' over the season works very well. Your customers' know what they will be paying and you know your receivables. There are many contractors that will tell you that this will not work, but we have been doing it that way since 1987. From 1979 to 1987 we either collected on-site at the time of the service or billed per cut. If you are employing anyone to help you, this time spent collecting is even more expensive. We started with nine accounts and now have over 700 accounts that we bill on a monthly basis. This does and will work if you are sold on the idea yourself. Put a self-addressed envelope in with the invoice for your customers' convenience. This will also help speed up your collection time. I guarantee you that the amount of money you spend to mail your invoices and to use a self-addressed envelope will be less than stopping and collecting on every job.

    Good luck and have a profitable season!


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