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SC93
09-07-2008, 01:30 PM
Back in the mid 90's I had a lawncare business and will be starting another one in 2009. My question is this. How do you guys think is the best way to collect payment?

By reading some of the other posts I know that some of you might ask why I'm waiting until 2009. I also own another service business and we are 100% full as far as clients go. Not to mention that our busy season is coming.

Thanks for your help.

quickcleanlawn
09-07-2008, 01:40 PM
what other kind of service business do you run ?
I collect payment in two ways check by mail, or cash/check on site, I use all of my monthly payments to take care of expenses, and the cash for just day to day stuff. It works out fine for me, just have to make it balance out.

SC93
09-07-2008, 05:02 PM
House cleaning & carpet cleaning. The thing with my business now is that if payment is not on the counter, we do not complete the work. I just worry about getting ripped off in the lawn business.

Big Lebowski
09-07-2008, 08:50 PM
My brother started to get pre-payments. He got tired of being stiffed and it was easier to stop an account when the money runs out.

Personally, like above, I bill them except for those few that want to pay right on the spot. My brother-in-law hates it when folks pay him while he's there. He feels it takes up too much of his time. Me personally, I don't mind at all. It keeps me in front of them, no ditching the bill and they would be pretty unlikely to fire you because you will always have an opportunity to hear what's on their mind.

I offer to all my accounts that they are to call me if I just pulled away or it's several days later - I will be right there to take care of whatever they need. It is those folks that don't tell you they are unhappy that are most dangerous to your business. You never get a chance to fix whatever is on their mind. You will lose opportunities to gain referrals. You will also lose the opportunity to improve. I feel that every time I show up and do a lawn I am working to keep that job all over again. I take it very seriously and want to know the minute they are unhappy.

But then again, I plan to be one of the biggest LCO's in the area. Sorry I got a little side-tracked there but you got it.

SC93
09-07-2008, 08:58 PM
...and thats another thing I hadn't thought about. Those that want to pay while it is being mowed. This will be an all employee type of business...I won't ever be there when it's being mowed. I guess another potential problem with payment...sigh... :)

Big Lebowski
09-07-2008, 09:21 PM
I highly doubt this will be problem. You either let the accounts know they are to mail it, or you trust your guys. I have always felt that if you cannot trust the people you hire, why did you hire them or why are they still working for you?

That is not to say you don't systems in place to keep people honest.

If anything, it will be those times that the crew picks up a new account and you don't even know about it. Every week they use your time and equipment but collect the money. A couple of those and they could have a pretty nice side job. If they spent an extra 20 mins a day doing other accounts, how would you know? That is a possible $100-$150 missing per week for you and yet you could be paying 1/3 or more of that in wages, not to mention other liabilities like comp.

SC93
09-07-2008, 10:27 PM
Well, I've owned a cleaning company since 1998 with others actually inside of clients houses....do I trust people? I trust them but do I TRUST them? I never trust anyone...if that makes any sense. I do because I must...but I've come to know workers all too well. lol Almost have more problems outside the house then there is inside the house. lol When I had a lawn service before I did all the work, thats why this is all new to me with workers.

Steve
09-08-2008, 05:46 AM
My question is this. How do you guys think is the best way to collect payment?

Some lawn care business owners will offer a 5 or 10% discount if you prepay for the year, early in the season.

Or you could accept credit cards.

realhuntin
09-08-2008, 10:18 AM
My question is this. How do you guys think is the best way to collect payment?

Just starting out you might want to think of weekly, (you cut or service the customer you get paid) this will keep money flowing. this way will help allow you to keep up with expenses.

After you get established better then you can go to the Monthly billing.

I would never take a season's "pre-payment", to many things and go wrong to get yourself into trouble with this type of business practice.

Business's can't survive with out monthly cash flow.

Big Lebowski
09-08-2008, 07:47 PM
"Monthly cash flow"

Tell me about it. Last winter I did many of my snow accounts at a 3 month billing. By the end of winter I was working with my own money - well sort of. It sucked anyway.

SC93
09-08-2008, 08:52 PM
When I mowed back in the 90's the deal was for them to leave the check some place because 95% of my clients were at work...sometimes they'd forget (riiight) but I'd still mow anyway...then have a hell of a time getting paid. This is what I'm trying to avoid since I am WAY more business smart this time around. So, I'm guessing when you say monthly billing that means you mow they pay after you mow...dang, I just hate that thought. lol Do you get burned much? Anyone use Pay Pal?

Little's
09-08-2008, 11:34 PM
When I mowed back in the 90's the deal was for them to leave the check some place because 95% of my clients were at work...sometimes they'd forget (riiight) but I'd still mow anyway...then have a hell of a time getting paid. This is what I'm trying to avoid since I am WAY more business smart this time around. So, I'm guessing when you say monthly billing that means you mow they pay after you mow...dang, I just hate that thought. lol Do you get burned much? Anyone use Pay Pal?

I have never had an account that didnt pay me. Sometimes it took a week or two, but as long as you continue mowing, they still have to pay you. Some people will skip a week or two until payment comes in, but at the end of the month they are missing half a months payment.

So my policy is to keep mowing, and keep collecting. If a full month goes by, then I would drop them and continue my collecting efforts for 2 full months pay (which has never happened). But I might add, I used to be a collection manager, trained people on collection in the field and over the phone. We used to hunt people down and do anything within the law (and sometimes outside the law). I used to have to collect on 400 past due accounts every week. My expected goal was to have a past due % of less that 5.9 of the 400 by every Saturday, which I hit the goal almost weekly. So I have no trouble collecting past due accounts.

I know, I hate collectors as much as the next person, but I was really good at it, and it afforded me to buy my home, so no complaints here!

SC93
09-09-2008, 10:44 PM
Thanks for your help everyone. :)

tedfrk
09-12-2008, 10:43 PM
i was told to include with the bill a prepaid self addressed envelope so all they have to do was put the check in and its easier for them has anybody used this tactic?and does it work?

Big Lebowski
09-12-2008, 10:50 PM
When I had a landlord for another business, he would do this. Most times I wouldn't use it because I had special envelopes for checks that showed the addresses. Also I had large checks and he would send small envelopes. Only slightly annoying. Small thing I know.

But multiply the cost by say 60 accounts and you've got to mow a whole lawn just to buy stamps and envelopes each month.

Steve
09-13-2008, 06:51 AM
i was told to include with the bill a prepaid self addressed envelope so all they have to do was put the check in and its easier for them has anybody used this tactic?and does it work?

I have heard of others doing this. Hey it's worth a try. See if you get your checks sent back to you faster. You will know if it works or not because you will see how many of your customers send the check back in the envelope you included. Let us know how it works out.

SC93
09-13-2008, 11:50 AM
I don't know about stamped envelopes but just an envelope with your address on it would work I think. I agree...make it a long envelope. I personally hate those little envelopes. Also, use the security ones.

SC93
09-14-2008, 03:39 PM
What do you think about only taking credit cards? The reason I ask is because I saw where one company only accepts credit cards. I have mixed feelings.....

Big Lebowski
09-14-2008, 04:05 PM
I have strong negative feelings about credit cards.

Don't do it. You have a cash business, why take on the added expense of the fees? It's like the stamp/envelope idea. Expensive with unrealistic contracts too. Traceable payments are just that.

If you were to ask a guy that took CC's for 5 years if he'd take them for lawn care - he'd say this, don't do it.

Besides, if you stop mowing today - you'd still be paying fees each month until your contract was up or pay huge cancellation fees. Also my people say I have to notify them 30 days before the last day. If I wait until 29 days before the contract is over, it is reinstated. If I do it at 31 days, I pay extra for canceling early. It's true. These people are the devil.

Stay far - far away.

SC93
09-14-2008, 10:09 PM
I don't currently take them because I want the check on the counter but...if you will check out propay.com I know several cleaning comapnies that use this and are really happy with it. It's only $35 a year with no contracts or anything that binds you. You do have to pay a small fee like .35 cents per transaction but I'd say if the client wants to pay with cc then charge them the .35 cents. or what ever the fee is.

realhuntin
09-15-2008, 08:21 AM
I'd say if the client wants to pay with cc then charge them the .35 cents. or what ever the fee is.

This is illegal. DO NOT TRY IT! Fed Gov will not allow you to charge the cc fees to customers using cc if you accept them as form of payment.

Steve
09-15-2008, 10:09 AM
but I'd say if the client wants to pay with cc then charge them the .35 cents. or what ever the fee is.
I don't know how the propay works, but with credit cards, your merchant agreement with them states in it that you won't pass the credit card fees onto the customer. I do believe that there are exceptions for the sale of gas because the profit margins are so slim.

Check out their merchant agreement and see if anything is in there about doing that.

SC93
09-15-2008, 02:24 PM
Well, I guess it's time to give a lil lesson. lol When a client is going to use a credit card I just raise their price...its not that hard. ;)

The government is here to screw us and you gotta figure out ways to not let them screw you. I'm not usually too nice to the government...I don't let the get over on me. I'll cuss them out quick and tell them to hit the road! And did it in 2005 and will probably do it again before I die. I relaize the regular tax guy/gal is just doing his/her job and I told him it was nothing personal...he was doing his job and I was trying to do mine. He agreed and it went my way for the rest of that problem. The problem was that they told me near the first part of December that they wanted a bunch of stuff and wanted it within a couple of weeks. Well, thats a very busy time for cleaning companies and I told them I can't do it so he started being a prick so I settled that problem real quick.

SC93
09-15-2008, 03:34 PM
Why do subs not work for lawn care? Besides them trying to steal your jobs.

Big Lebowski
09-15-2008, 03:59 PM
OK there are a couple errors here. The government has no control over how much you charge for your products. Whether that be gas or what have you. There are no special rules for gas.

Here is the actual issues etc. When you agree to accept credit cards you also agree to not charge more for doing so or they can revoke your ability to accept them. No government is NOT involved here.

How to get around this legally is to offer your widget for $10 but your cash price $9.50 - that's what gas stations do - check the sign (Cash Price, never Credit Card price)

It's really that simple. And oh, if your going through propay or the type, you do not have any agreement with anybody about charging anything so if you want charge $20 more, it's up to you. (Accept paypal? Charge more, let the customer pay the convenience fees)

SC93
09-15-2008, 05:13 PM
I just hate the way the government always try to screw us then go behind us and spend our money in crazy ways. Here they are trying to run a whole country but I bet they couldn't run a small business. Thats why I get pissed off when they try to give us some other charge...little as it may be, it can add up.

Personally, I talk to my clients as friends....so even if it is against some type of law I'd just tell them like it is....I'm not suppose to charge you extra for taking your credit card but I either have to charge you the extra or I won't be able to take credit cards anymore. So instead of charging you $30 I gotta charge you $31. I guess the moral of the story.....I'm glad it's not against the law or else I'd probably be argueing with them again...and that stresses me out! :eek:

Little's
09-15-2008, 08:00 PM
This is illegal. DO NOT TRY IT! Fed Gov will not allow you to charge the cc fees to customers using cc if you accept them as form of payment.

How is it illegal? I can name 20 gas stations in my town that charge a fee for using credit cards. Most are at least .50 some as much as 1.00. Paypal charges a fee, almost everyone I know charges a cc fee.

QuickMow
09-19-2008, 02:29 AM
i accept credit cards and 100% of my customers use it, best way to manage for me is invoicing app from ZOHO and they use PayPal