The secret to getting paid on time?

Discussion in 'Business Operations' started by Gus McGee, Dec 22, 2017.

Tags:
  1. Gus McGee

    Gus McGee LawnSite Member
    Messages: 108

    Has anyone managed to figure out the secret to actually getting people to pay on time? I've been in business for a long time and I still have not managed to crack this nut.

    I am mostly talking about for routine season long maintenance services for residential clients, such as weekly mowing services. I don't usually encounter problems from commercial clients or even most landscaping services.

    I have tried nearly everything but nothing seems to work well. Every year I seem to get more angry and frustrated over slow paying customers.

    • Residential mowing contracts seem to scare away the majority of prospective residential customers, and the one's who do sign don't always pay on time.
    • Late fees help a little bit, but they also create a huge headache from people calling and throwing temper tantrums.
    • People rarely are in favor of the idea of prepaying for services and working off escrow
    • Calling every week to nag for payment doesn't seem to help a whole lot
    I wish we could ask for social security numbers and run credit checks on people.

    Anyhow, what has your business done that has helped alleviate a lot of problems with slow paying customers?
     
  2. wbw

    wbw LawnSite Fanatic
    Messages: 6,317

    Run their credit card the day after service.
     
    Bcoogan23 likes this.
  3. knox gsl

    knox gsl LawnSite Fanatic
    Messages: 6,558

    The best thing I did for monthly was billing being sent out on the first day of the month. Taking CC on my website and late fees after the 15th. Presentation is a big key to getting paid. If you ain't got your crap together why should they?
     
    WetspotFL and Service.com like this.
  4. Rockchoplawn

    Rockchoplawn LawnSite Senior Member
    Messages: 586

    I am moving next year towards auto draft. For those enrolling, no convenience fee. For those who wish to write a check or not store on file, invoices are sent the 1st and due the 15th.

    To encourage those paying by card to just do autopay, they will pay the convenience fee if not enrolling
     
    WetspotFL and Bcoogan23 like this.
  5. sjessen

    sjessen LawnSite Fanatic
    Male, from Knoxville, Tn
    Messages: 5,375

    It would seem automatic payment or similar at the time of service is the wave of the future. Human nature is what human nature is. Some will pay the day of service, some will try to get out of paying unless they are nagged, others use us as a float, and then there are the procrastinators.

    Have you considered giving them 2 prices: a lower one if they pay via automatic payment, cc, etc and another higher price if they are slow? this would need to be handled at the time of the initial interview/signup process and can be done in a light hearted way so as to not offend them. The boundary is set, everyone knows what it is and they are put on notice from the get go that dragging things out will only cost them more money.

    In my opinion the other options you have tried or considered only lead to an adversarial relationship which will help no one. To be fair, though, most every one loses an invoice, forgets, etc. etc. so some sort of grace is helpful. It is the habitually late that are the problem.
     
  6. Todd73

    Todd73 LawnSite Silver Member
    Male, from Florida
    Messages: 2,336

    All customers are going auto draft this year. New customers, from this summer on, are pre-pay. Special projects get auto-drafted day of service. Trimmed two palm trees for a lawn maintenance customer today, charged the card as soon as I got home. No waiting around to get paid. Decided a few months back that my business is lawns, not the money lending or credit business.
     
    kemco, River, Steve and 5 others like this.
  7. TPendagast

    TPendagast LawnSite Fanatic
    Male
    Messages: 13,392

    you have to get established, come highly recommended and get to the point where people are begging for you to do their work.
    It happens, really it does.
    when you get there, you WILL still have slow payers, but its no this overwhelming "thing", its just something your office (wife, whomever) just has to keep following up with.

    Literally, Ive had people I just didnt want to work with (largely because of an employee or personality that I had to deal with), and Ive told them no, only to have them beg and offer more money.
    Im not saying to take or not to take that customer it's up to you, but when you "arrive" in this place of demand, your money issues arent one of your problems anymore.

    dont misunderstand me, money is always an issue, its just not a "problem"
     
  8. GRANTSKI

    GRANTSKI LawnSite Bronze Member
    Messages: 1,445

    Sounds like you may be trying to collect weekly ? If so that's probably half your problem : it makes your service more of a headache then a convenience. On both ends.
     
    Mow-Daddy.com and knox gsl like this.
  9. weeze

    weeze LawnSite Fanatic
    Messages: 14,521

    make them pay at time of service. if they aren't home they can leave a check or run their credit card if you offer that service. if they want to pay by the month make them pay on the 1st of the month before you do the work.

    there's no reason to have to wait around for money these days except on commercials...but they always pay so it's not a big deal.
     
    Bcoogan23 likes this.
  10. jonnyz37

    jonnyz37 LawnSite Senior Member
    Messages: 419

    Offer two forms of payment. Either bill first day of month and due by the 10th for that month's work.... Or card on file and billed with each service. Only options to offer. This whole getting paid several weeks later is not for me and s you can see, not for you as well.
     
    Bcoogan23 likes this.

Share This Page