pre-paid on commercial account?

Discussion in 'Lawn Mowing' started by cochino12, Feb 6, 2006.

  1. cochino12

    cochino12 LawnSite Senior Member
    Messages: 319

    has anybody contracted a commercial account on a pre-pay basis? I was called to give a bid for a fairly large (for my company) commercial property and get the feeling the company does not have/want to spend much money. Judging by the quality of work done last year I'm sure it went to the lowest bidder.

    I will be running a 2-3 man crew (includes myself) and the job should take about 6-7 hours. I am reluctant to leverage myself so heavily one one job, and would feel much better if I could get the company to pay a month in advance.

    I realize that it will probably never happen but was curious if anyone here had ever contracted a commercial account for advance payment? I think I will stay away from the job completely, maybe it's just too big for me right now? Advice? thanks
  2. JimLewis

    JimLewis LawnSite Fanatic
    Messages: 6,872

    I'm sure someone somewhere has been able to get advance payment on a commercial job like this. But even if you found someone here on Lawnsite who said they had, I don't think that means you're going to. It's just not the typical way to do business - especially for commercial. You can sometimes get away with things like AutoPay, Auto Credit Card, Pre-Pay, etc. with residentials if you approach it the right way. But I don't think it works for commercial jobs.

    Taking on large commercial accounts (not necessarily the cheapos you described) might be a good move for you in terms of growing your company and profitability. But if you don't have enough income coming in to pay your two helpers for 2 months while you wait for that first commercial payment, I'd say you're not ready to take on larger commercial jobs just yet. Save up some dough in the bank for "operating capital". Then when you have enough to pay your helpers for a month or two, then go ahead and start taking larger commercial jobs like this. Then if payments don't start for a month or two, you're covered until they come in.
  3. OnMyOwn

    OnMyOwn LawnSite Senior Member
    Messages: 372

    I've accepted over 10k in prepaid commercials this year. I had to offer a discount to achieve this, but I have their money to invest for the course of the next year.

    I was surprised that companies took advantage of this, but everyone is trying to tighten the budget. I up-sold them on additional services already and have recouped the lost discount volume with additional GP $.

    Client is happy...We are happy!
  4. McClain

    McClain LawnSite Member
    Messages: 53

    to get one of mine to just do two payments of 25,000.00 each and he said today that would not be a problem. so I just hope it goes thru..
  5. ed2hess

    ed2hess LawnSite Fanatic
    Messages: 14,361

    Most commericial paid out of state don't pay in advance, you need to expect up to a couple months delay. Most of the time they process hundreds of payments and if you are new they put you at the bottom. And it is important to establish what the bill needs to look like, who needs to approve it and how do you get it to them. Unfortunately most bills have to be approved by a GM then forwarded.
  6. Frontier-Lawn

    Frontier-Lawn LawnSite Silver Member
    Messages: 2,955

    i have my 1st commercial client on one month pre pay and they had no prob with it. 99% of all my estimates have no probs with paying forward one month.
  7. Envy Lawn Service

    Envy Lawn Service LawnSite Fanatic
    Messages: 11,087

    As previously stated, I do Advance Pay and that goes for commercial accounts too. This is they way my company does the billing and accounting. So that's just the way it is.

    I have no time, tolerance or patients for corporate red tape. If they sign with my company, the entire contract is already 'approved' and the outlay is a fixed monthly expense.... so just pay it!!! It doesn't have to be drawn up like this, mailed here by this date, then transferred there, then approved by someone signing off, then sent for review, the forwarded over to accounting, check cut, put out in the mail at some point... to where the account stays out about 2 months all the time.

    Occasionally, I will have to handle an odd-ball extra services bill this way, but not often.

    Most of them pay the first month at signing. Soon after, I cut a bill due for the next month. This way, if they insist on making a bunch of red tape fore themselves just to pay a lawn bill... they have plenty of time to get it done so that I'm not working on or dealing with past due accounts or 'lag-time'.

    On the distance accounts where pay at signing is not feasable, the first work I do for them is cutting a bill. Everyone pays in advance of their service period.

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