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||10-18-2012 04:38 PM
I put some time into a monthly billing program for my area (because nobody offers anything like that anound here). If you dont mind to read over it and leave some feedback, negative or positive. It will help me and may give you some ideas on how to improve your system.
After weekly pricing has been agreed on, I'll perform 1 month of services before sending the client an invoice. They will then be required to pay a minimum of 60% of there monthly routine services. The other 40% will then be added to the end of year. Once season is over, they will continue normal monthly payment until bill is paid
Monthly bill- $200 Min payment- $120
The $80 left over from each month will be added to last bill.
The last bill will come to $480 (for 6 months). The minimum payment will remain $120 for 4 months.
Additional services could be anything from pressure washing, brush removal etc. Those can be broken up over a course of so many bills and added to the minimum payment until paid.
no offense but nobody is doing that because it is pointless.
if you do a customer for say $200.00 per month and they choose to only send you $120.00 minimum because their budget is tight, what makes you think they will be able to write you out a check for $480.00.
cash flow in this business is key and billing behind not only makes you carry the money and become bank of america for the month you are willing to carry them even further by taking less now and letting them pay you even later.
unless you are charging fees and interest there is absolutely nothing in it for you and if you do charge extra for that no one will do it because it will cost them more money to cut their lawn.
either way it is a lose lose situation for you and just gives a customer a additional edge to screw you in the end.
what if they move? and worse move out of state?
what if they become unemployed? or something horrific happens in their lives?
like i said, unless you want to get into the financing business you need to keep up with your payments as they accrue for the sole purpose of having as much cash flow on hand as possible and never being on the hook for too much cash.
i know it is all in the name of trying to drum up work and get more accounts but there are many other creative ways to do that by offering a throw in service that is very cheap for you to provide and you can mingle in with the services you are getting payed for.
as a business you need to be able have a positive revenue for everything you do and every hour of the day you work regardless how little.
you spend a day doing freebies or waiting extra months to get paid it puts you in the red.
fuel adds up, repairs add up, labor costs add up, insurance and on and on and it is very important to have all the revenue available to meet these costs without taking away from other areas in your life.
it is very easy to say, " hey i made 5 grand this month and the only down side is i just billed everyone and it takes a couple weeks for all of the checks to come in, and in the meantime i will have to use my mortgage money to pay a few things and it is no big deal because the other money will come and i will put it back "
and then this guy was on vacation and it took longer to get it and this guy is a slow pay and this guy i have no clue what his problem is but he always takes forever.
deferring payment would only magnify that problem and too many guys are having to use their personal money to hold the fort down until the monthly cycle flows back and it just erodes the quality of life.
do some sales research in your area to see what the typical customers are and target them.
are there lots of seniors? then offer senior discounts and if they are veterans offer a veterans discount and if they are both give them both.
old people jump on stuff like that because they are on fixed incomes.
offer free seasonal color plantings in strategic areas like front sidewalks entrances or the corner beds and light pole at the end of the driveway.
i am not talking re-landscape the property but a few mums and cabbages in the fall and a flat of flowers a couple times through out the year.
like 70 bucks worth of plants for each property for the season and if you do quite a bit of homes you can get great deals on buying quantity.
do you got a lot of soccer moms? they usually have busy husbands working to pay for their lifestyle that does not have the time to mow the lawn and throwing them little discounts and little things like the seasonal color mentioned above goes a long way in getting those accounts.
these are just many ways and i am sure you can think of many yourself but you got to find out who you are dealing with and work from there but don't defer any payments and allow yourself to wait for money, it will hurt you more then it will help you.
||10-18-2012 07:29 PM
I have always gotten paid the same day I got the work done. Reason I even gave this a thought was because, I heard alot of lawn business are doing this but, they are setting it up on a 12 month payment plan. For 12 months your looking at less than 60% per month. I know it will hurt cash flow.
They wouldnt be paying $480 in one lump sum. As I said they would continue there normal monthly payment until it is fully paid. In the event of an accident, they move or become unemployed, you simply cancel that account. Regardless if you do monthly billing or paid as soon as the jobs done your gonna lose that client
I see what your saying about the whole percentage thing though. I wouldnt use this as my main marketing tech. I had in mind people who are on fixed incomes to be able to get the lawn serviced like it should while, while gaining a few accounts because of this. Safe to say in the long run anyone will suffer more loss than gain.
I appreciate your input very helpful.
||10-19-2012 05:22 AM
It sounds like a really well thought out plan. My electric and gas bills do something like that, they call it budget billing, where I have a fixed amount I pay, the only difference is over time balances itself out.
The major problem I see is the collection side. Especially when a customer gets slammed with a large bill at the end of the year. Its very hard to collect when Christmas is right around the corner- who's going to come first...you or the customers family? Theres millions of americans out there with large credit card debt. A major part is they ignore the debt they have, and keep spending. They all feel like it's ok to do just the min. monthly payment, and eventually (YEARS!!!!) the card will be paid off. I see that example being applied to you. They are going to run up a tab with you, and not be able to pay it all off at once. Ever hear of the guy that has 10K in credit card debt, then calls the credit card company and says he's not paying it? Guess what happens? The credit card company takes him to court and settles for 5K. The guys credit gets whacked pretty hard, and the credit card company is out 5K. Could you afford to take a hit like that if it happened?
Just remember, your business is not a bank. Theres no reason to financially support your customers.
||10-19-2012 06:59 PM
Yea, I mean when I heard of monthly billing I kinda had my doubts but, then again if they do it then it must work for them. Then again they may think of it as cheap marketing and end up losing more than its worth.
I really appreciate you guys input. I'll just stick with the old fashion way.
||10-21-2012 07:37 PM
Why not bill out what you do, get paid, and manage your money for the winter. Thats how I do it, and how always done it.
||10-22-2012 02:07 AM
Do you give them a price for the whole summer and bill them each month? How do you deal with people that do not pay?
||10-23-2012 12:53 AM
Do you give them a price for the whole summer and bill them each month?
Can you charge them a per cut fee and tally it up at the end of the month in an invoice? Some members will even bill at the beginning of the month.
How do you deal with people that do not pay?
It all depends on the amount owed to you. Ideally you want to keep the damage to a minimum that any customer can cause you by not paying. For customers that owe a certain amount, you can send them a late payment letter and then scale it up from there to maybe even small claims court.
Check out the late payment letters
here though first and see if they could be helpful
||10-23-2012 08:52 PM
You guys have to stop sniffing glue.
Stop wasting your time collecting payments.
Do I have a contract that says, "No Refunds"? Yes.
How long is my season? 6 Months.
What payment term can the average client handle? 3 post-dated checks, 1 payment (post-dated check) per 2 months.
How many clients need payment reminders? None.
If I miss (average) 5 visits per season and per client, do I still get paid for those visits? Yes.
In May, a client must give me 3 checks.
Check 1 is for May and June.
Check 2 is for July and August.
Check 3 is for September and October.
If it rains several times, the client is paying regardless. This is a company, they are paying me to make myself available to provide the work.
If I was to be paid only when I was ABLE to work (sunny day), I would find a new job.
If you stock shelves for a living, and the power goes out... Do you still get paid? Yeah, you do.
||10-24-2012 01:29 PM
Scott for those that don't understand the benefit of doing things this way, how much has doing that changed or effected your business operations?
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