Slow and Late payments

Discussion in 'Business Operations' started by bohiaa, Apr 17, 2012.


    TYTILIDIE LawnSite Member
    Messages: 78

    Bottom line is this, to deal with slow payers, you need to be patient. Had we all started out correctly in the first place, slow payers wouldn't bother us AS MUCH. Sure, it sucks. Believe me I have had plenty. The reality of it is, had I been smart, or any kind of a business man instead of a technician or a lawn jockey, I would have purchased all of my equipment slowly over the years, had no debt and had $50,000 saved in the bank. Then, slow payers wouldn't matter so much.

    I almost went out of business because of the same thing. I was owed $55k over a 4 month period. All of our money was going to the employees and what bills we could afford. We did an analysis of where we really were with the business. It turned out, we were doing ok had we had our money but we figured that if we didn't save up and pay off debts that the business wold soon implode on itself. So over the winter we made some kick ass money on snow removal. Instead of spending it on us, my Typhoon or vacations, I paid bills. I was $65k in debt Aug of 2010 and as of about two weeks ago I am now $20k in debt. Not too bad. I feel so much better. Even though we aren't done, I am proving I can control myself and I have learned a very valuable lesson, debt and a lack of savings will KILL you!!

    Savings is important for moments such equipment failure, slow payers, unforseen issues, TAXES, etc.. I can't wait to ditch all of my debt, build savings and stop doing living by the seat of my pants.

    Sorry for the goofy response but, it does indeed reply.
  2. Mountain Peak

    Mountain Peak LawnSite Member
    Messages: 203

    I started weeding out slow payers years ago. I simply started raising my prices for the slow pays. There is a cost to not having your money. That 150 bucks they owe you is worth less than 150 bucks if you have to wait six weeks for it. I got to the point in my business that I just don't tolerate it. Now, if a customer has a money issue and they actually talk with me about it I might work with them but even that usually doesn't work out very well.

    Drop them, raise their prices, get them out of your business.
  3. BOSS LAWN 2343

    BOSS LAWN 2343 LawnSite Senior Member
    Messages: 407

    Took the time this season to stop mowing-servicing for these types of customers. :clapping:
  4. Charles

    Charles Moderator Staff Member
    Messages: 8,513

    Nothing worse than going to the mailbox filled with bills and no checks. I have never gotten used to it. I always feel like some of them won't pay me even though everybody eventually has paid. Very distracting during work and your days off. Your job is to focus on collections. Ignore collections and you increase your risk of failing. I wish I had thought more about weather droughts and collections before I got into Lawn care:hammerhead:
  5. grump507

    grump507 LawnSite Member
    Messages: 12

    i wish i had thought of those things you guys mentioned before it was to late. especially with raising their prices when they dont pay and weeding them out. BUT STILL my 1 big killer was trusting someones word,handshake,and even sighned contract. when you purchase equipment to aid in doing better work based on income that was supposedly gauranteed and then have it ripped away its pretty much impossible to recover. it wood take a ton of resid. customers to make up for it and where i am the industry is saturated with back stabbers and undercutters.
    thanks to everyone who took the time to talk!!!!!!!!!
  6. easy-lift guy

    easy-lift guy LawnSite Gold Member
    Messages: 3,372

    All of my customers pay in advance for monthly accounts. My dealers are given Net-30
    or -5% for Net 10. Once my dealer or dealers pay late 3 times in a row or use the same excuse 2 times in a row, "for not paying on time" they receive a field promotion and their new terms are prepay.
    This seems to get their attention and they usuall live with those terms.
    easy-lift guy

    TYTILIDIE LawnSite Member
    Messages: 78

    This is why I was saying to have savings. Then you could afford to wait but, if you set a time frame in which you promise to stop service, you can mentally afford to drop service on the client. We do mostly commercial, if you have problems with late payments, stay in residential. A lot of commercial companies pay when they feel like it regardless of what your contract says. And the awesome thing is, no one knows who is responsible for getting you paid and why you haven't, it's nobodies fault.
  8. BOSS LAWN 2343

    BOSS LAWN 2343 LawnSite Senior Member
    Messages: 407

    I absolutly HATE going to the mailbox and there is nothing but BILLS when there should be PAYMENTS topped off in the mailbox. I started sending my invoices earlier so they get paid on time.
  9. easy-lift guy

    easy-lift guy LawnSite Gold Member
    Messages: 3,372

    Really, Can anyone afford to wait to get paid, much less draw off a savings account to keep up with paying ones own bills?, "mentally afford", I have not heard that term used before, how about legally afford. If my customers or dealers payed for services rendered or products supplied when they wanted to what would be the point of working for yourself, much less working for anyone?
    Sounds like customers enjoy getting away with taking advantage of your services rendered and your company, don't let them or anyone else get away with that.
    easy-lift guy

    TYTILIDIE LawnSite Member
    Messages: 78

    I couldn't agree with you more. Don't get me wrong in what I am saying, not trying to say we should wait. I don't like going to the mail box either. The simple truth is, it is part of our business and it just needs to be dealt with whether you prefer to ditch the late payers or wait, it is just part of the game.

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