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General Business Discussions A place to talk about general business discussions.

Year round invoice vs billed monthly


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  #1  
Old 01-26-2006, 03:09 PM
kc2006 kc2006 is offline
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This is in relation to what Soupy said in my other post about flyers.

I did the math and my minimum charge is $25 for mowing. Theres roughly 28 weeks in a season here ($700). If I were to bill monthly it comes to $100 a month plus tax. If I were to bill year round (12 payments) it would be $58.33.

This could be a huge advantage for getting customers attention from my flyers. At the top I could put
"Weekly Lawn Service Starting at $58.33 a Month!"

That would drive my competition nuts and make them say this guys a moron, and the customers would probably floke to see what the hitch was. I've been saying I want to get most of my clients over to 12 month billing, it would be nice to have income all year round.

But just wondering what all you guys do? Do you bill per month or do you bill all year round? Why are you doing it the way you are?
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Old 01-26-2006, 05:45 PM
Branchlandscape Branchlandscape is offline
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We bill at the end of each month for anything that has been done for that month. Not sure why we do it that way but we always have.
Our customers are not under contract so that does make a differance.
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Old 01-27-2006, 11:43 AM
mowboy mowboy is offline
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I only ever bill year-round if I offer services year-round. I think people find it psychologically difficult to cut checks when there is nothing happening, even if they know deep down that it all works out. On the other hand... some might appreciate a balanced bill.

Have you thought about offering some sort of reduced service in the winter months? For example, I would often offer litter control, blowing off, snow clearing, trimming, bed maintenance, etc (of course it all depends on the area of the country you live it!) The visits would be short… even 5 or 10 minutes but the customer does see some value as you are still there every week. Not all my customers would go for it but many would and they loved it. As well, it is some income for you in the winter months.

Thinking as a consumer... I would have to say that I would be a little offended by an ad worded as you suggested – “Weekly Lawn Service at $58.33/Month!” It implies weekly visits year round. I think you would need to state in the ad that the cost is year round but the service is not or it would come off as underhanded. That’s just my opinion though *
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Old 01-27-2006, 08:02 PM
Soupy
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It's called *budget billing. I have heard it to often from little old ladies that they just can't afford $157.50 each month during the 8 month cycle. Well how about $105 for 12 months then. That's $52.50 that can pay for the phone bill, water bill, or what ever they need to budget for.

Your not scamming anyone, in fact you are offering them something (credit) at no additional cost. How can anyone be offended by that.

Sure, it's not everyones cup of tea, but If they don't want to pay yearly then they can always pay during the service months. I even let them pay weekly if they choose.

I never advertised price before, but it has gotten to were we have to compete with the ones that do. I don't see anything wrong with advertising your lowest price (many business in other industries do). If the 12 month billing is how that low price is achieved then so be it. Hey, if they want they can pay one time and be done with it. It's up to the customer how they choose to pay even though most service companies make you pre-pay, or pay at time of service.

I agree that it should be stated at the bottom of the flyer the terms for the $58.33 price. Put an * next to the price at then state the terms at the bottom of the flyer. *

Mine says this. * Some restriction may apply. Price is starting price for weekly maintenance in your area for up to 34 visits based on 12 monthly payments. Price may vary depending on size of lawn, landscape obstacles, and amount of trimming. We offer other billing options to choose from.

Granted that I have not sent these out yet, but I did real well with our aeration flyer that had the price listed. I did the same thing, but at the bottom explained that it was for up to 5k sq. st and that each addition 1k would be $xx.xx amount.

The truth is our weekly price would not work, so that is why I am using the lowest possible price (12 month price) which is the price for most lawns in the targeted area. I wouldn't advertise that price in an area that doesn't fit the price.

Sorry, that was a little long winded. Just wanted to give my opinion on the subject.
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Old 01-30-2006, 04:39 PM
mowboy mowboy is offline
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Hi Soupy,

I think your disclaimer is good... and that was my point. I would not be offended by a company offering some budget billing and I do not think it's a scam. My point was that without stating on the ad: 1) the number of visits that the cost is based on and 2) mentioning that the cost is over 12 months you are not being upfront with the customer.

No problems with a balanced bill in itself!
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