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Overdue Invoices

Discussion in 'Business Operations' started by Credsfan03, Aug 12, 2018.

  1. Credsfan03

    Credsfan03 LawnSite Member
    Messages: 35

    I have quite a few unpaid invoices that are well over due from customers this year already. What can I do to try to start collecting it?

    JLSLLC LawnSite Fanatic
    Messages: 19,833

    Stop cutting them and contact
    Walker56 likes this.
  3. Todd73

    Todd73 LawnSite Silver Member
    Male, from Florida
    Messages: 2,586

    Stop servicing them until they are up to date.

    Send certified letter demanding payment.

    Take them to court or turn it over to a collections company if they still don’t pay.

    Start making new customers pre-pay.
    kemco likes this.
  4. Bunton Guy

    Bunton Guy LawnSite Silver Member
    Messages: 2,426

    Me personally I start badgering them around the 45 day late mark. I can get really annoying around 60+ day mark. If it's a client that I e-mail invoices I will re-send the past due invoices about every 5-7 days (usually every Sunday) I keep sending them until they pay. It's more then likely not the best practice but if they have a problem with it they are more then likely going to pay me to stop the pestering.

    after the 45 day mark I stop all services and at that time I send a letter,e-mail and text all stating the same thing that services have stopped until full payment. I send all 3 ways seeing that most will try the "we didn't get it"
    hort101 likes this.
  5. TCSGuy

    TCSGuy LawnSite Member
    Messages: 88

    When I get to 15 days I am emailing them copies of their past due invoices and mailing them a copy. When we get to 21 days I type a letter and send it with a copy of their invoice and let them know that I expect payment.

    I flat out tell them that they have no issues needed us to be out there ASAP, so we expect to be paid ASAP.

    We do irrigation and landscape lighting. So if I don’t service them, it might not be a huge deal to them. But we started about a month ago letting customers know that they needed to be gone at the time of service for payment or have a CC on file or no service.

    If all else fails, we go to court. I won’t pay a collection agency to try and collect.
    hort101 likes this.
  6. Clay Guinn

    Clay Guinn LawnSite Member
    from MT
    Messages: 79

    We are on still net 15 payment for all of the older clients but on prepay/ 50% deposit for any new client to pretty much eliminate this problem.

    After 15 days we stop service. Helps cut losses if they fail to pay outright. I start by emailing/calling them to let them that their bill is past due and service will be temporary stopped until the balance is paid or and arrangement is made. People sometimes forget or were just out of town. If it reaches 30 day I sent a letter with the statement and note about the overdue balance. If it reaches 45 days I resend the letter for the next 2 weeks. At 60 day I proceed with the action to take them to small claims court. Of the ten or people that I have threaten to take to court only 1 didn't pay at the point and one with major landscaping that I had to start to proceeding on a lien.

    At some point for small balance it is not worth my time to try to collect. I just terminate service permanently and put them on the "Don't do business" list that I have going with a couple of my friends who are in the same line of work in the area.

    At first I thought it would would hurt my future business being a hard ass when it came to collecting but soon realized that it didn't and the customers I was having problems with were the ones I didn't really want to be doing work for in the first place. You can be doing the best work in town but if you can't collect you will fail.
  7. fivestarlandscapes

    fivestarlandscapes LawnSite Member
    Messages: 97

    Just call them and let them know. The ability to email a PayPal invoice is very helpful in this situation.
    oqueoque likes this.
  8. Todd73

    Todd73 LawnSite Silver Member
    Male, from Florida
    Messages: 2,586

    Man, you guys are nicer than me.

    Net 7 invoices for customers not on auto pay. They get the invoice sent at the end of the month, notice two days before due date, and notice on due date. Payment not received by the due date, whether they’re pay in arrears or pre pay, service is suspended. No dough, no mow.

    At first I thought I might be too harsh, but then it occurred to me, what’s the point of having a due date if I don’t enforce it? A monetary penalty wouldn’t work since they’re already not paying. So I suspend service. To me, all these people are paying their mortgages, car loans, cable tv, cell phones, etc. on time, why can’t they pay the lawn guy on time too? If they are the type of people who can’t pay on time, they’re free to sign up for auto pay and not have to worry about the late penalties. If not, they take their chances.
    JMK26 and BMWNJ like this.
  9. Mitty87

    Mitty87 LawnSite Silver Member
    Messages: 2,497

    Invoices are due upon completion of work. I'm not always organized in making sure I get paid right away, such as taking down CC number when they have to leave before I'm done, i have been too nice and don't follow my own policies every time.

    Most customers reply to emails or texts within a couple hours. So when the job is done and I still haven't been paid at the 2 week point I start to get annoyed when they suddenly stop regular communication. I will get my wife to call from her phone number that most clients don't know, or I will knock on doors at around the 3 week overdue point. The stress I get from late payments has got to the point where I might just raise prices another 3%, then offer a 3% discount for anyone who is able to make payment within 1 day of the bill being sent.
    hort101 likes this.
  10. oqueoque

    oqueoque LawnSite Platinum Member
    Male, from Jersey
    Messages: 4,761

    Down there in Florida, you can't wait too long, since many people already have one foot in the grave.

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