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SpokaneSRC
03-05-2011, 05:30 PM
If you have contract customers, do you bill them monthly? and if so, do you ever bill for the previous months cuts or are they always billed and paid prior to cutting?

I was thinking for customers who sign at least a 3 month contract, that I would bill them at the end of the month and have it due by the 10th of the next month. Too risky?

950thomas
03-05-2011, 05:54 PM
I bill monthly my customers pay after work is performed

shadrach
03-05-2011, 06:21 PM
We bill monthly. If its 4 cuts, bill is sent day of 2nd cut and due day after 4th cut (if 5 cuts then its 3rd and 5th cuts). If payment not received by day before the 1st cut of next month we stop until payment is received.

mark123
03-05-2011, 07:33 PM
I bill on the last day of the month for work performed that month.

Growing Green
03-05-2011, 07:38 PM
For me it depends on when the agreement is started. For example, if someone signs an agreement started today then April 5th, will be the next invoice date and they have 15 days to pay or they receive a late payment and work ceases until they pay.

Matt

Hedgemaster
03-05-2011, 09:17 PM
For those who bill monthly, do you do so for ALL customers, or are there some who WANT to pay you at the time of service, or perhaps even send you a check without ever getting a bill?

Curious, as I haven't figured out how to handle this part yet, and spring is about here!
I'm used to people being home when I do work and they pay before i leave.

jymie
03-05-2011, 09:20 PM
The only billing I usually do is my commercials. I collect the residentials as they get serviced.

Simpkins
03-05-2011, 10:00 PM
I billed monthly when I ran my business. The 30th of every month, I'd send invoices out and state that the "Due Date" was the 15th. This was billed once work was done. You are taking a risk I suppose doing this but you can usually tell what you are getting into. If you don't feel right about it, require prepayment.

mark123
03-05-2011, 10:03 PM
For those who bill monthly, do you do so for ALL customers, or are there some who WANT to pay you at the time of service, or perhaps even send you a check without ever getting a bill? ...

Yes, some people can't stand to let me leave without paying. Actually, it's more work. 4-5 payments per month to record instead of one. I can't complain though.

Hedgemaster
03-05-2011, 10:17 PM
Yes, some people can't stand to let me leave without paying. Actually, it's more work. 4-5 payments per month to record instead of one. I can't complain though.
That's sort of what I was wondering... does it make things too complicated if some people want to pay "now" as opposed to waiting?

I'd imagine "monthly" would work very well for a "contract" client, but how about "one time" customers - say a hedge cutting job - do you bill them at the end of the month as well, or is that a "take it as soon as you can get it" situation?

mark123
03-05-2011, 10:26 PM
That's sort of what I was wondering... does it make things too complicated if some people want to pay "now" as opposed to waiting?I just use my daily schedule from Gopher and mark their payment by their name so when I come home to mark the completed jobs I can also input the payment. Mark it as soon as they pay even if you have to get off the mower and walk back to the truck. Billing someone for a payment they made would get sticky. :D

I'd imagine "monthly" would work very well for a "contract" client, but how about "one time" customers - say a hedge cutting job - do you bill them at the end of the month as well, or is that a "take it as soon as you can get it" situation?
No, everyone gets a bill on the last day of the month. I've been considering even sending a zero bill as a receipt to those that pay at service but I never seem to get around to it.

cmpenn67
03-06-2011, 01:54 AM
I have gone to billing the month in advance. It seems to be working out well for me. I send out invoices on the first and due by the 15th of the month. Customers haven't complained one bit.

SpokaneSRC
03-06-2011, 11:18 AM
I'm afraid of asking a new contract client to pay for a month in advance when they know nothing about me or my company. But I also don't want to have to try to collect (for the previous months service) from people who have a hard time paying.
One time services need to pay at the time the service is completed.
I appreciate all the info.

justin_time
03-06-2011, 11:50 AM
I send my bills every 15th and 30th of the month. I also give them 15 days to pay, after that we stop service

Shark1611
03-06-2011, 07:20 PM
We bill about 90% the first of the month. The other 10% pay after we mow. If we have slow pay we send a past due notice by e-mail. If they do not respond by next day the service is cut off till payment is made.

I had one customer that late pay too many times and fired them. Don't want to play games with my customers!

atlandscaping
03-06-2011, 07:33 PM
If you have contract customers, do you bill them monthly? and if so, do you ever bill for the previous months cuts or are they always billed and paid prior to cutting?

I was thinking for customers who sign at least a 3 month contract, that I would bill them at the end of the month and have it due by the 10th of the next month. Too risky?

I think monthly is good for the down economy.

fieroboi
03-06-2011, 08:31 PM
I bill on the first of each month for that months service, with payment to be made by the 15th of the month. It has worked out very well and I am not out a lot of service if a client can't pay. I also have a lot of clients that have insisted on giving me post dated cheques 6 or 12 months advance. I really like that option, never an issue knowing your not getting paid. I've never had a client's cheque bounce, thank goodness for "lil old ladies".

For our one time services/clients, they are billed once service is performed and same rules apply ... 14 days to pay. Most of these clients want to pay once your done anyway, so it has never really been much of an issue for me.

Lloyd
Blue's YardFX
Camrose, AB

USA Lawn Care
03-06-2011, 08:37 PM
I've never used a contract but we collect as we mow. It has absolutely saved the spring cash flow issues. When I ran my business years ago, we did the usual billing at the end of the month. Spring was way too expensive for me by doing that (expenses keep adding up until money starts flowing in about 7 weeks later) and I think any new folks in the business NEED to look at keeping cash flow by either collecting the day of the cut or (as some here do), collecting in advance. I even tried billing twice monthly (15th and 30th) but my customers hated it. If our payments / bills crossed in the mail, they were confused and were constantly adjusting what was actually due. We did it for a few months and dropped it.
We are 100% pay as you go since last season and it has been a life saver and probably the most positive change our company made.
New lawn companies...........you NEED to be able to cash flow your business and customers paying NOW will save you tons of issues.
Hope this helps someone out.

SpokaneSRC
03-07-2011, 10:25 AM
All this info is a big help. Probably will collect as service is performed, at least at the beginning.
Thanks for all the input.

mcscapes
03-09-2011, 07:51 PM
Mcscapes bills advanced monthly but the customer sets up the day of the month there due, I don't claim to know what my customers bills look like but the first is a load for a homeowner so let them pick whats good for them. We haven't had a problem with customers paying but we do have some that forget and that's why I'm here to remind them. Business isn't just about you doing a good job it has a lot to do with what kind of person you are, there are times when you need your customer to work with you the same should be done for the customer. Thanks for listening BRIAN

lxarth
03-18-2011, 09:17 PM
Last year I lost about 13% of my income because I would bill after work was performed. The problem I ran into what that I was doing about 4 cuts, before they got the bill. They didn't look at the bill for a couple of weeks, and before I know it, they are 2 months behind, and I'm out a lot of money.

This year I changed that. I bill in advance. I'll either drop of an invoice a week before the new month (the last cut of a month), or the first week of the month (the first cut of a month).

With new customers I tell them I bill in advance, and no one minds it. If someone were to ask why, I would tell them I lost a lot of money last year, and our policy is the customer either pays at time of service, or in advance. But no one asks.

Another trick I decided to do this year, is to bill for a full month in advance, even if it is in the middle of the month. This way, if a customers lawn needs a lot done, and it's something that my full service would cover any ways, they are paying for it. I don't need a customer wanting full service at the end of the month getting mowing, edging, trimming, blowing, weeds sprayed, fertilizer, etc, for only a few bucks because it was the last week of the month.

Then what I do is prorate the next month. So if a customer signs up to pay, say, $100/mo (an easy round number to work with), but they do so in the middle of a 4 week month, they still have to give me $100. But next month they are only billed for $50.

I explain that to them as well. And no one has a problem with it. I mean, what happens if you put a ton of product and work into a lawn, but they cancel 2 weeks into the service?

SpokaneSRC
03-18-2011, 10:50 PM
Then what I do is prorate the next month. So if a customer signs up to pay, say, $100/mo (an easy round number to work with), but they do so in the middle of a 4 week month, they still have to give me $100. But next month they are only billed for $50.

That is an excellent idea.

mark123
03-19-2011, 01:36 AM
Last year I lost about 13% of my income because I would bill after work was performed. The problem I ran into what that I was doing about 4 cuts, before they got the bill. They didn't look at the bill for a couple of weeks, and before I know it, they are 2 months behind, and I'm out a lot of money. ...
I don't understand how you are out the money.

lxarth
03-19-2011, 04:02 AM
I don't understand how you are out the money.

I'm out the money because they didn't pay. If I bill the customer at the end of the month for $100/mo (again, an nice even number) they already own me for the entire month. If they don't pay that, I'm screwed, I can't undo what I did.

Now, the customer takes a few weeks to even think about paying, and what happened with a huge chunk of people, is they just didn't pay it. I already did the service, so I'm out the money. And that will be like $200, because I dropped off the invoice at the end of a month (instead of the beginning) and kept servicing the lawn waiting for a check.

But, if you bill ahead of time, the worst you will be out is 2 weeks of service (around $50). Because you could make sure all invoices arrive by the first, and have them say they are due by the 15th. If you don't get money by the 15th, you don't do their lawn.

mark123
03-19-2011, 08:59 AM
I'm out the money because they didn't pay. If I bill the customer at the end of the month for $100/mo (again, an nice even number) they already own me for the entire month. If they don't pay that, I'm screwed, I can't undo what I did. ... If they don't pay after the first invoice do you just give up?

jymie
03-19-2011, 09:52 AM
I collect from my customers the day of the cut. The only ones that get invoices from me are the Commercial accounts. The residential all leave me either a check or cash on the door, or are home when we come. I found it's way to easy to put a bill to the side and conveniently forget about it, take the dead beats to small claims court to get your money thats owed. Hopefully you had them sign something before they became your customers, like an estimate of the work you will perform. Once they sign the estimate, it's a binding agreement.

mark123
03-19-2011, 10:33 AM
... I found it's way to easy to put a bill to the side and conveniently forget about it ...
Don't you use the Gopher software?

jymie
03-19-2011, 10:50 AM
Don't you use the Gopher software?

Yes I do use the Gopher Software (http://www.gophersoftware.com/?ref=gopherforumgopherimage). I rely on it more for the scheduling than the monthly billing. I input payments each day at night as I close out the day before I print up the next days work sheet. I just don't want to make it easy for my residentials to conveniently forget about paying me. I only invoice my commercial accounts at the end of the month. This way, I always have cash on hand, since I have way more residential than I do commercial. I could not function and pay employees if I had to wait a month and half to 2 months to get the money flowing.

psparaco
03-20-2011, 03:57 AM
Some of our clients are monthly and some are weekly.

Monthly clients are bill the last day of the month for the next month.

Example: I will be sending out the monthly invoices for the month of April on March 27, 2011. They have 5 days to pay. (04/02/11) If its late, there is a $10.00 late fee.

So April has 4 weeks in it. So if I charge $10.00 per visit. Then thats 4 projected visits and they receive an invoice for 40 bucks. Now lets say out of those 4 weeks. it only gets serviced twice. Then when i goto send the May monthly invoice out the last week of April. They will have an existing balance of 20 bucks in their account and will be billed the difference.

I do it this way so I am paid ahead of time and no chance of someone screwing me over for work done and not being paid.

Weekly clients are required to pay for their services 5 days after completion of service. I made it 5 days cause if i cut on a Monday . Its due by friday cause most people get paid on fridays.

My contract states all this and then intial which they want... monthly or weekly payment schedule.

lxarth
03-21-2011, 06:59 PM
Last year I was pretty naive about all this. I didn't expect to loose as much as I did. But 13% is a ton. That's like 6 weeks of pay!

To answer a previous question, If they didn't send payment I stopped showing up. I would send collection letters and even call them. I was going to take them to court, but the statute of limitation is 75 days, and I just waited too long.

What really surprised me is that not only is it not that much money, but that some of them were customers for over a year and just decided to stop paying without even talking to me.

If you want to fire me, that's fine. Maybe you don't like my work, maybe it's how much I charge, maybe it's that I'm a small business and you want someone with a bigger name, or maybe you wanted a service done that I don't do...whatever it is, can't they just say something before I put a few hundred bucks into their lawn?

I only have residential customer. Some of them have an at-home business (doggie day care, and a regular day care are the two I know of) and it's far easier for them to get billed.

This year, if someone wants to be billed, I will bill them out early and explain my policy. I will give them 2 weeks to pay, and if I don't get money before the 3rd visit, I will just stop going.

I also won't do anything that costs anything but labor and some gas...so I won't spray weeds, lay down lime, fertilizer, etc, until I get a months worth of service...that way the only thing I'm really out is my own time and a little gas.

Steve
03-22-2011, 06:27 AM
To answer a previous question, If they didn't send payment I stopped showing up. I would send collection letters and even call them.

When you would call them, what kinds of responses were you hearing about them not paying? Were there any similar reasons from multiple customers?

Did any of the phone calls help resolve the issues or not?

lxarth
03-22-2011, 11:52 PM
I wish I could say that the letter or phone calls helped, but they didn't really.

I don't think I got much back from those customer.

I remember one customer I just went to the house and told them I need the money. They paid...eventually.

Others, just ignored my calls and letters. I do remember one who called months after the fact, after I started sending nasty collection letters, and tried to say that I mowed over $30 in new flowers (starts) that they just installed. So to try and get some money, I agreed to take $30 off what they owed, and if I remember correctly, they only owed $60.

It's really frustration trying to collect $30. But even more so when I'm trying to get around $300. $30 doesn't break me, but $300 can keep me afloat.

It's just easier for me to collect at the beginning of the month now and to make sure I prorate the 2nd month, and not the 1st.

Steve
03-23-2011, 12:12 PM
Do you feel now looking back at this, this was more of a problem created from a billing policy or was this more that these customers were just not the kind of customers you wanted and would have tried this anyway, regardless of your billing policies?

Liberty Landscaping LLC
03-31-2011, 09:22 PM
I think this year I have the eternal solution. New customers and my one tried and untrue customer who pays when they want I will take a credit card number from them. I will put in the contract that after they are late by 15 days the credit card will be hit plus a late/service charge fee of $15. Maybe it will motivate them to pay on time. Any suggestions. This is my first year with cards I signed up for the squareup account. Hopefully It will work and help me out. I always billed at the end of the month. I handed most customers the bill on the 1st and it was my time to connect how are you the family are you happy with us anything extra you want an estimate on that sort of thing....Mr. Niceguy has left. Replaced by Mr. Jobs done pay up!

lxarth
04-01-2011, 12:09 PM
@Steve: I think it was a combination of things. I think the billing on my part, being done at the end of the month, was a major factor, as they got behind (in my books) immediately.

If someone looses their job they can tell me: "Hey, I lost my job, so I have to cancel service". Then I could cancel service only a couple weeks into the month, and they only own me, say, $60. I don't have contracts currently, so someone could cancel at any time.

But that is another reason to bill ahead. If they cancel, it's all good, cause I have their money already.

But I also feel that these kind of people cheated me because they could. I have had a customer call me because they think their check bounced (it did not, and I told them that), they decided to send me the payment again, and some extra. They said that it will cover the service, and if the first check never bounced, the extra can be a little bonus to me.

Now that is an awesome customer right there. So going back, I think that the customers who cheated me was like a crime of opportunity. But they couldn't have if my billing was better. But they did it because they could.

I do think that some planned to cheat me from the beginning though. As I started service, and waited for a payment that never came. I leave invoice after invoice, and left one message after another.

Trials and Tribulations, 'eh?

psparaco
04-02-2011, 01:09 AM
I recently added a new way for customers to pay us this year from requests from several existing clients. they asked if we use paypal. WE DO NOW. I like having my money now instead of waiting for a check to arrive in the mail or hunting them down for the cash. Just thought I'd share that insight with everyone.

Paul

mark123
04-07-2011, 01:13 PM
A pertinent question to the topic is how many of you guys run your businesses hand to mouth?

psparaco
04-07-2011, 10:01 PM
hand to mouth. i'm confused. rephase it please.

Hedgemaster
04-07-2011, 10:57 PM
Hand to mouth is a phrase which is used to denote living with the help of bare essentials. Living from hand to mouth means having absolutely meagre resources. What the phrase actually means is that, as soon as the resources are coming in, they are getting spent on basic necessities. To live from hand to mouth is to have a precarious existence. It literally means to intake or eat whatever one can lay their hands on. For example, "he was living hand to mouth after he was fired from his workplace.

I'm not exactly sure it means in the business sense, but I'm guessing I fall into that category. Unless you're financially secure before starting into the business, I suspect most are. Equipment isn't cheap, and the bills don't stop when there is no work.

lxarth
04-08-2011, 02:15 AM
how many of you guys run your businesses hand to mouth

Are you meaning: "How many of you are taking any and all work you can get?"

I'll take work as I can get it. But I just turned down work today because the person asked "are you busy tomorrow (Friday)". My reply was "Yes, I have lawns tomorrow, but I'm in your area on Tuesdays". She said never mind, and said that her husband will just do it.

I think they just wanted the yard cleaned up really quick for a weekend think (party, BBQ, etc).

Thursday and Friday are, obviously, golden days for home-owners and their lawns, so everyone wants it cut then. I told one customer that I can do his lawn on Mondays, and when it gets busier I can move it to Thursday or Friday, he was understanding and OK with that.

Now, if you are asking how many of us are literally working just to eat, then no, I have/make money. I go out with friends, enjoy life, etc. And it's all because of this work. I'm also very thrifty/frugal/cheap...with my own needs, not with my business.

cruzgardening
04-08-2011, 02:58 AM
I'm afraid of asking a new contract client to pay for a month in advance when they know nothing about me or my company. But I also don't want to have to try to collect (for the previous months service) from people who have a hard time paying.
One time services need to pay at the time the service is completed.
I appreciate all the info.

i got 2 rental properties 2 months ago and i asked the landlord to pay upfront 3 months and he did so with no fuss, i did the same to one of my new clients which seem a bit shady i asked him for 2 months in advance and he asked why i explained and he agreed both of this clients have no annual contract with me so they can leave when ever they want and i will return the months i do not work for them or they can ask me to work and the payment off.

so basically if you do not trust someone i would say charge them upfront 2-3 months and let them know you will bill them at the end of the current month...

this makes closer relationships even with the clients that you dont trust.

cruzgardening
04-08-2011, 03:10 AM
I would send collection letters and even call them. I was going to take them to court, but the statute of limitation is 75 days, and I just waited too long.

.

a friend of mine told me i could put a lean on one of my costumers homes from the unpaid balance of a job we did last year i asked around but no one knew if it was true the balance of the job was $650 the client had already paid me 3/4 of the money but did not pay the rest, at first she said she forgot then she said she would mail me the check which never came. This was an extra job she did pay me for my Lawn care services, so anyways i service her neighbor and she knows a lot about laws so she scared her by saying i had already send a letter to the county office to place a lean and with in 5 days the check was in my mail box for the full amount she owed... don't really know if i can put a lean on anyones home but that seem to work :)

mark123
04-08-2011, 06:26 AM
a friend of mine told me i could put a lean on one of my costumers homes from the unpaid balance of a job ...
Some states allow this but not mine. Mowing, pruning, snow removal aren't permanent improvements so they don't allow for liens in these cases.

"Hand to mouth" means making barely enough to get by with no extra so that if one mishap occurs everything falls apart. It's sort of like saying "living paycheck to paycheck". Both are common English language idioms but I sometimes forget that English isn't everyone's native tongue.

lxarth
04-09-2011, 02:08 PM
I understand what "hand to mouth" means, but I wasn't sure if he was asking if some of us are just making enough to get by, or if our business is just doing anything it can to get by.

In my state you can file a labor lien (commonly called a mechanics lien) if the last day of work was within 75 days.

I just happened to wait too long. I was calling, emailing, texting, and sending letters. That's when I found out (from a customer who owned me over $300 and still never paid) that I can put liens on homes. That customer told me because he had sold the home already, nice guy 'eh?