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slow paying customers ?

Discussion in 'Lawn Mowing' started by cigar6, Jun 9, 2002.

  1. cigar6

    cigar6 LawnSite Member
    Messages: 13

    Hey all.

    Just curious how some of the more experinced operators handle slow paying customers or clients.

    I service only commerical accounts, several of which are hotels, and they always seem to average about 30-45 days between invoiceand payment.

    I know of some operators who claim to stop servicing or cutting a particular customers account until they are current again.

    I don't think that is the best solution.

    I have instituted a late payment penalty of 10% of the total amount due and appied after (30) thirty days.

    Any ideas !!! What do you do in situations like this??

    Thanks as always for the input!

    MJ LANDSCAPING LawnSite Member
    Messages: 40

    You must weed out the late & slow payers. My commercial accounts are generally net 30 days, and I recieve a check. If you dont see a check after 30 days something must be said in a company letter about this matter. Try to give them a little scare. If you have a contract with them, which you should then they are obligated to pay you by the terms written in the contract. You can scare them by saying, If payment is not made by 30 days after invoice date then our collection agency will handle the matter. I use that expression for slow & late payers and after that letter goes out I have a check in my hand about a week later. People hear coolection agency and get scared.
  3. gene gls

    gene gls LawnSite Gold Member
    Messages: 3,213

    I have found that most commerical accounts are always 30 to 60 days in paying and some even longer. The invoice has to pass through too many hands.

  4. Lawn-Scapes

    Lawn-Scapes LawnSite Silver Member
    Messages: 2,810

    30-45 days doesn't seem so bad.. for commercial.

    Are you pre-billing? If not... maybe consider it for next year.
  5. robert payer

    robert payer LawnSite Senior Member
    Messages: 282

    When ever being paid late which is rare, Often stop to think if the customer may not be happy with service. Often times they are telling you something. People who pay fast are telling you thank you for a job well done! Slow can mean discontent, inconsiderate, irresponsible, or broke. My view comes from residental customers. Commercial account often have crazy pay shedules. Our invoices state upon receipt. Which really means at your earliest convenience. This net 15, 30, 60 Who ever started it? We all service the first 30 days before even billing out the work. We are not a banks for corporations or the wealthy. We are guys mowing lawns for a living.

    All should consider changing to:
    Payment upon receipt!
  6. Brickman

    Brickman LawnSite Bronze Member
    Messages: 1,249

    When working for commercial you can expect 30 to 45 days. Pre-bill is a good way around that. I no longer allow residential and small locally owned commercial 30 days. I did the work NOW PAY UP. Now they have 15 days. The larger commercial with out of town corporate offices all pay with in 30. I would never sign a contract for over 30 days before they pay. That is B. S. I don't care what any body says. If you do I would recomend putting some thing in the contract that says you will be paid so much extra for being their bank. The ONLY reason big corps do that is so that they can use YOUR money longer to make more money for them. I DO NOT believe for a minute that there are too many hands to send it thru and that is the reason for 60 days. NO way in the world. That might be their excuse, but that is not a good enough reason for me.
  7. Albemarle Lawn

    Albemarle Lawn LawnSite Bronze Member
    Messages: 1,544

    Put it in the contract so if they choose to take out a loan from you, they pay 18% interest/year.

    Some like to earn interest on other's money.

    Charging interest/ late fees will speed up payments.

  8. maple city

    maple city LawnSite Senior Member
    Messages: 305

    I have the same experience that commercials just take longer to pay. I don't really sweat it, because I have never not gotten paid for my commercial accounts. Since I want to keep these accounts, I don't send any letters or call until after 60 days.
    I know that one of my commercials gets their bill from me and sends it to their corporate office, who then cuts a chack and sends it to me. We are in different states, and this can take some time.

    Residentials, I will stop mowing of they are over 60 days. I can understand forgetting to pay something, so that's why I will let them have some time. If they are over 60 days, it can mean that they owe me quite a bit and they are just getting themselves in deeper, so I let the grass go until they can get it together. It has only come to this once for me. If they have a financial problem, I will work it out with them.
  9. Brickman

    Brickman LawnSite Bronze Member
    Messages: 1,249

    ALL my invoices say "all accounts go to collection at 60 days".
    That by it self seems to have helped with a more timely payment.

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