Residential Even payment

Discussion in 'Business Operations' started by 205mx, Feb 6, 2013.

  1. 205mx

    205mx LawnSite Silver Member
    Messages: 2,392

    working on my residential payments.

    I have always read of people doing Even payments. Where they add up all the services and divide by 8 or 12.

    I have one problem. in late february we do a mulch job, what happens when they stiff you in march? I know theres a contract with a break fee and all...

    but when it comes down to it, if they dont pay, youre out money. I am not worried about not having income during the off season, i just budget pretty well.the only reason I thought about this was not for me, but so that my customers could have an exact budget figure.

    maybe wait to offer this in the second year after a relationship is built?

    Maybe just offer this to commercial properties?

    What i do currently is map it out for clients, basically give them a month by month EXPECTED cost.

    if its not broke dont fix it?

    Thanks yall

    Maybe just bill in advance?
  2. 205mx

    205mx LawnSite Silver Member
    Messages: 2,392

    Bump. Anybody have anything to add

    DLONGLANDSCAPING LawnSite Bronze Member
    Messages: 1,418

    have them pay for the mulch material and pay for your labor monthly with everything else.

    For exmaple. If you charge 70 per yard installed on a ten yard mulch job . They have to pay 350 dollars per yard upfront for the mulch and then 350 dollars over 8 or 12 months. Keeps both of you happy
  4. 123hotdog

    123hotdog LawnSite Senior Member
    Messages: 485

    I have many by the mow properties. I also have many year round service agreements. I bill on the 15th, due on the 30th. I add a 5% for any payments not paid by the 5th (one of the best things I ever did). Year round service agreements are as follows.

    1.) mowing done every six to 15 days as needed

    2.) bushes and trees will be trimmed twice a year @ no charge to the customer as long as landscaper does not have to get off ground. If so an estimate will be provided for approval before work begins.

    3.) Labor for mulch is included in agreement and done in Feb or March. However a charge of $50 per dumptruck load for delivery and customer will be billed for the cost of the mulch. I provide an invoice from the supplier. ( This is to protect me from a price increase at the supplier ) Once in late summer when it is hot we turn mulch at no charge.

    4.) I spray for weeds in beds and fence lines ect. on the first mow of every month.

    5.) They get up to three snow plows a month at no additional charge. More than three in a calendar month and its $45 an hour. ( This keeps and idiot from calling every time it flurries ) I don't do salt at this time.

    I'm sure there is allot more in the agreements but I hope this will steer you in the right direction and give you something to think about.
  5. ToddH

    ToddH LawnSite Silver Member
    Messages: 2,192

    I am going to start pushing contracts that spell out terms and only do 12 month billing.
    I had one customer on a 9 month agreement and he kept trying push off the start month and or the end month early. So it will be a pay go system for mowing or a contract for mowing plus

    I am putting in a clause that says basically, bill at the beginning of the month, 1% 10 days, net 30. 10 days past due is $30.00 late fee. At 30 late we add 1.9% to bill and late fee each month until paid. @ 60 days service is terminated and collections begin.

    Either party can cancel with 30 days notice. "With Cause" I have 30 days to fix and keep contract. Without cause I bill through the 30 days without prorating any months. I am also due 20% of the remaining balance for direct and or indirect cost including opportunity cost.
  6. 205mx

    205mx LawnSite Silver Member
    Messages: 2,392

    That sounds pretty solid. Thanks.
  7. 205mx

    205mx LawnSite Silver Member
    Messages: 2,392

    That's smooth. I don't do snow, but my hedges are included in my regular service if desired. Usually only a couple bucks more. I basically run over them all once a month. Very very minimal clean up this way.

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