Discussion in 'Starting a Lawn Care Business' started by JNB Landscape, Jan 21, 2010.

  1. JNB Landscape

    JNB Landscape LawnSite Member
    from TN
    Messages: 12

    Hey all,

    Last year was our first year in business and we had some issues with collecting money from a few customers, which was finally resolved. We send out invoices, but they took forever to send the money, or leave it under the door mat, etc. What is the best way to collect from your customers?? We thought about accepting credit/debit cards this year and just charge their cards the day of or day after we mow. Also, what programs do you use for your invoices or billing?

    I appreciate any and all advice. Thanks
  2. echeandia

    echeandia LawnSite Bronze Member
    Messages: 1,131

    I have had a couple that I had to threaten with a law suit and a couple that I did. As a result my contract now states that they will pay "reasonable lawyer fees and costs" so I can add those to the suit.

    There isn't much you can do except not pick them up the next season. I have one from last year that I am not picking up again.
  3. JNB Landscape

    JNB Landscape LawnSite Member
    from TN
    Messages: 12

    Any body else??
  4. Greg78

    Greg78 LawnSite Silver Member
    Messages: 2,010

    Most all our services are prepaid. No money no service.
  5. nobagger

    nobagger LawnSite Gold Member
    from Pa
    Messages: 3,065

    Collecting money will always be an issue. Its seems you will always have slow payer's. We've been doing this since 2003 and every year we get one or two late, even non payer's. We're probably going back to court again in the spring. As far as programs, we as well as many other's are using quick books. It doesn't matter what program you have you will still have these problems.
  6. nobagger

    nobagger LawnSite Gold Member
    from Pa
    Messages: 3,065

    Pre-pay is something I think is going to get more and more popular. Its something we are seriously looking into, just need to work out a few details.
  7. JFGauvreau

    JFGauvreau LawnSite Bronze Member
    Messages: 1,298

    Ya the previous company I work for, we had a lot of prepaid, they had the option to prepaid in full, which saved them like 5% or prepaid in half.
  8. tinman

    tinman LawnSite Bronze Member
    from ga
    Messages: 1,346

    Having a card on file helps and is one way to go. A certain small percentage will leave you hanging so to prevent that you can be careful about who you work for or get suspect people to prepay. You get a feel for who is a slow payer after a while just by talking to them initially. Also if their yard has debris on it that is a a sign they may not be on top of things.... like paying bills on time. Don't know why but it is. :)
  9. 360ci

    360ci LawnSite Senior Member
    Messages: 995

    I give my clients (of whom I carefully select) twenty days notice to pay their invoice in full. I invoice from the 15th to the 15th of the next month. If I don't receive payment within 20 days, I add interest at 7.5% on the amount owing. After another month of no payment, I send another invoice by registered mail with some not so kind words. They always pay after that. I've only had one problem, and that was before I properly screened my clients. I mainly do work in the high end of town. For one-off jobs, I make sure to get the money before I even show up for the job, or I just don't show up.

    I don't believe in pre-paid options. If I advertise a discount for pre-paid, then some of my clients will feel like they're overpaying me, and will probably look elsewhere or not rehire me in the spring.

    I find the best option is cash for payment. However, I let my clients know that I prefer cheques, only because it protects them, and myself should something go amiss. I normally drop off my statement to each client after the 15th of the month, and in it is the invoice of the services I performed for the last month, along with a postage paid return envelope so they can mail me the cheque.

    I'm not sure who's all legit here, but I am. I have proper insurance, business papers, etc. I also have a business chequing account. It costs me $1.25 to deposit a cheque, which is why cash payment is a bonus.

    I looked into getting a portable POS system, which connects to my account so I can accept debit and credit cards right at the clients door. I decided against this for two reasons. First, it's a bit abrupt to just knock on their door and say "you owe me now", versus a cheque which they have a couple of weeks to mail to me at their leisure. Most of my clients have no money problem from what I can tell, but again, if they have to wait to get paid, and I'm standing at their door the day before, it makes both parties feel uncomfortable. Second, are the rates for a portable point of sale system. Credit cards take up to 1-5% of the gross amount, and you have to pay for a bank deposit on top of that. So, the added convenience isn't worth it for lawn care work unless the average transaction is hundreds of dollars, and you only have 1-3 a day, or you'll be pissing away 5% of your profit just on fees, where it's only 0-1.5% with cash or cheques. Of course, the more you deposit, the higher the discount is on fees, but it still costs you at the end of the day. I look at it as getting a foot long sub sandwich for lunch, instead of throwing that money away toward unnecessary banking fees.
  10. bohiaa

    bohiaa LawnSite Fanatic
    Messages: 5,220

    From time to time you will Get screwed. most of the time It's Not much money.
    we have 3 to 4 each year that simply will NOT pay for this or that reason.
    total around 5 to 700.00 per year.

    there's nothing you can do about it.
    I'm NOT the type to go spend 125.00 to take someone to small claims court, take 3 to 5 hrs of my time to do this. only to wind up with winning and cant FORCE someone to pay.
    and besides it's a rite off IF someone does NOT pay.

    It's just NOT that big of a deal.

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