What are your Late Payment Policys?

Discussion in 'Lawn Mowing' started by PrecisionLandService, Jan 13, 2004.

  1. PrecisionLandService

    PrecisionLandService LawnSite Member
    Messages: 43

    I think my new rule for weekly mowing customers is gonna be if i dont recieve payment by the due date there will be a late fee of $15.00.... If its a few days late i will try to let the late fee slide( I will give them an extra 5-7 days).... If the customer has not paid after 30 days from the due date I will stop service until I revieve payment. Interest will then accru after 30 days form the due date of the unpaid invoice! Does that sound fair.... I have many customers that feel they can wait until the end of the year to pay up.... It will help to have a due date too, I didnt have one on there before.
    What are some of your late payment policies? I want to be fair... I dont mind giving them a little while to pay there bill, but some of my customers take advantage of it.

    How long should i give my customers to pay there bill, how many days from the time i mail them out?
  2. Stihl036pro

    Stihl036pro LawnSite Member
    Messages: 232

    Thats a good post, I go threw the same stuff. People take advantage. You would send in a truck or a mortage payment late. I know I would'nt. I would also like to here any polices reguarding this topic.
  3. tryz

    tryz LawnSite Member
    Messages: 27

    i give my customers 30 days from billing date to pay after that i charge 1.7 % interest, after 60 days no payment i put account on hold and send out letter, after 90 days i do phone calls and sent out final notice letters, then last option send it to colection agentcies. I don't know if this is the best way but i just copied it from larger companies like your gas, tele,and hydro. I seem to get most of my monies before the collection companies get involed, but i get a certian amount of unpayed acounts every season, not because of poor quallity workmanship, just because these customers that do that with every company they deal with not only lawn care.

    I think we as lawn care companies should set up a black list of people that don't pay

    what do you think?
  4. NCL

    NCL LawnSite Member
    from NJ
    Messages: 132

    I agree with tryz about the black list, some people would never be able to hire a legitimate business again. My policy is similar to tryz's .
  5. Victor

    Victor LawnSite Bronze Member
    Messages: 1,430

    I have adopted a late payment policy that has worked wonderfully for me. I send out invoices on the 15th of each month, and my payments are due by the 30th of the month. I tell my new customers this when they sign up for service. This way, they have a few days to fall back on between when my money is due, and when I have to be back at their properties for the first cut of the month. They know that if I haven't received my money by the time I'm scheduled to cut their lawn on the first day of the month, I'll stop service, and their lawn won't be serviced untill I have been paid in full. I don't let accounts get more than 1 month delinquent. This has worked out really well.

  6. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Messages: 10,178

    ok, how many guys have actually enforced the late fee, and/or cancelation process, but were able keep the customer? this is the thing about these late fees and interest fees. customers
    (the ones who like to jerk u around) think that we are whale cr@p, you know, so low that we can't even float, and i'm thinking that if you actually ENFORCED a late fee, or cancellation until the matter was resolved, they would just grab the next guy they saw and he would start tommorow. for me, when a client doesn't pay, and is very late(30 days) it usuaLLY MEANS THE END FOR US.
  7. JimLewis

    JimLewis LawnSite Fanatic
    Messages: 6,876

    Like Bobby, if someone is a late payer, then my "policy" is just to get rid of them. At least in the market I am in, there's PLENTY of good clients to go around. Not worth my time trying to hound late payers.
  8. mtdman

    mtdman LawnSite Gold Member
    Messages: 3,143

    The problem with these policies is that there are laws that govern the assesment of late fees. I found that out when I tried to level late fees on a client that happened to be a lawyer. At the time, in Michigan, you couldn't assess late fees until the payment was 30 days past due. However, in this business, by that time you could have 2 to 3 months worth of work into someone and not get paid. I make my payments due on the 15th. If I'm not paid by the 30th, I start calling. If I don't get a response or payment soon after, services are suspended. At the 30 day overdue mark I hit them up with $10 for every 30 days. If they are continual late payers, I charge a deposit to reinstate service, and usually I get rid of late payers that are habitual.
  9. Jusmowin

    Jusmowin LawnSite Senior Member
    Messages: 727

    I send out bills on the 26 of each month and the customers have to have payment in by the 10th of the following month or its a $25 dollar late charge
  10. DJL

    DJL LawnSite Member
    Messages: 237

    For the lawn work I send invoices out the end of every month. They get 14 days from invoice date to pay the bill.

    For the contract I'm working on now...If not received by due date 15% late fee. If unpaid balance ever goes beyond $500 then all services are discontinued until a zero balance is achieved. In addition, if some sort of partial payment is not received 45 days from the due date on the invoice all work is stopped no matter what the balance is.

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