The best way to Handle cash flow problems

hickory

LawnSite Member
Location
Norwalk, CT
It's not that we are not making any money, it's the fact that everyone waits 35 to 45 days to pay. I'm not sure if I should put on the invoice a late fee charge for anything past 30 days or what. I'm also considering getting a line a credit on my business checking account to cover other expenses and pay roll while I'm waiting for the checks to flow in. Does anyone have a line of credit on the business account? I'm not talking 100k, I'm looking more along the lines of 5 to 7k and when the checks get deposited it will counter whatever credit I have used. This way I won't have to worry about paying it off it will be automatically be done.
 

jajwrigh

LawnSite Bronze Member
Location
Martinsville, IN
In my service agreement I implemented a clause about timely pay. This is for resdentials by the way....it says that I need to have the check 10 days after I mow or services are suspended. I also have 10 and 12 month plans...so I spare a few days after the first of each month. Last season I waited 120 days to get paid from my next door neighbor!! Ridiculous!!
 

MudslinginFX4

LawnSite Bronze Member
Location
Raleigh, NC
All my residential customers are expected/required to pay within 15 days of date on invoice. I will send out a second invoice with a late fee added after 15 or so days. I've never had any problem with this system besides with the people who aren't going to pay anyways.... thats when I send them a letter from my attorney or a court date for small claims.
 
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hickory

LawnSite Member
Location
Norwalk, CT
Geez, 120 days!!! I hope you don't do work for them now. Then again it's hard when it's a neighbor you don't want any bad blood to transpire.
 

Equipguy

LawnSite Senior Member
Location
Orlando, Fl
We do a lot of condo's and our agreement states payment is due by the 25th of the month in which service is preformed. During the bid process we always make it clear what our payment expectations are. By doing this we really dont have any problems with late or slow payers.
 

James Cormier

LawnSite Bronze Member
Location
Ma
Why not just budget for 30 days to get paid, I alway put due upon reciept on all my bills, but I budget for 60 days. That way I never have cash flow prolbems.
 

newleaflandscape

LawnSite Senior Member
Location
Michigan
in our contract we get half down at signing and it is stated that if payment is received in five days there is a four percent discount and if it is not received in ten days there is a four percent penalty. Way I look at it you would be paying about four percent on a line of credit anyways why not give the option to the customer.
 

Team Gopher

LawnSite Platinum Member
Location
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Some of our clients will split their customers in half and bill each group every two weeks in efforts to improve cash flow.
 
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