Do you bill monthly?

[lxarth]

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]

Lawn care business tips

Originally Posted by lxarth 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]

Originally Posted by lxarth

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]

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]

Originally Posted by lxarth

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]

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]

Originally Posted by jymie

... 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]

Originally Posted by mark123

Don't you use the Gopher software?

Yes I do use the Gopher Software. 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]

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]

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.