I charge a $15.00 late charge if the payment is 15 days or more past due it used to be $5.00 but the customers were not getting the message

Do a percentage. $10 late charge on a several thousand dollar install or even a big maintenance bill is peanuts. It wont motivate them as much as a percentage would.

Get a credit card number on file with all of your customers and you won't have this problem. If they don't pay by the time specified by you, run their card and be done with it.

Yes and No and Maybe.

For years, we had the standard 30 past due with a $10 late fee. Some people routinely ignored it and started to take up to 45 days to pay. Half the people will pay the late fee. the other half would pay when the late fee appeared on the bill but would refuse to pay the extra $10.

Since the start of the economic downturn of last year, the slow started to get slower, so we changed our terms to 21 days from the date of the invoice and any amount past due 22 days plus will be charged a late fee of $10 per month. We also said that we reserve the right to suspend or cancel service if the account is past due 60 days from invoice date. If they didn't make prior payment arrangements, the past due amounts will be turned over to collections or small claims court. And oh by the way, credit cards accdepted are Am Ex, MC, Visa, discover. Then we highlighted the terms in yellow.

We changed our terms because we do most of the billing starting the 25th to the end of the month, and on a 30 day cycle, some late payers weren't seeing a late charge until the billing cycle after the current one. By making it 21 days, they see the late charge immediately on the current new billing cycle. In essence, some were getting a 60 day grace period, thus no incentive to pay timely.

One of our small commercial accounts went from a 30 day payer (2007)to a 45 day payer (2008). On the new system, they have had only 1 late fee charged and now they are writing the check on day 21 and mailing it.

My slow paying full maintenance accounts are now paying quicker, but I have one lady who paid the Sept bill w/o paying the late fee. It was on the October bill that is past due. Its a $70 and some odd cents with $30 in late fees. I sent her a list of what was billed and paid with check numbers and date with a note that said i was giving her until Jan 14 to pay and it was going into collections for $100 plus whatever odd cents. In other words, just pay your &%$#@ bill (and find another mowing guy).

I sometimes get the "I didn't get the bill in the mail" story. After 15 days I charge a $15.00 late fee to their next bill and they always call asking about it. Then there is no more arguing about whether the received the bill or not. I usually get paid within a few days after receiving the bill.

It worked for me. Payment due on 15th of the month, after that it is late. As soon as I started it I seemed to have less slow payers. People are used to payment due dates and penalties for not complying. You will have some problems,but in general it helps to legitimatize your business and people will naturally take you more seriously. I also list my collections agency in my agreement and make a note of it in the foot note of the bill.

Utilities run on the same priciple!

Why not you.

You're not a bank.

If you start training your new customers to the idea, they'll know where your coming from. Now, with your established customer base, I would send a friendly letter explaining that because of the economy,...........................ect. And follow through. Keep in mind, that the home owner isn't always thing about there lawn/landscape. Also, with mulitple homeowners that have two income payers, anyone of the spouse could have mistaken that your bill was paid.

What you need to do is figure how much time and trobble your going through (office work to recover the inital payment in time, labor, matierial(letters) etc, and add this as a Percent of the total)
Then,
remind your customer with the percent of the total as the expense of re-calling, re-mailing, re-e mail, etc, too collect.

i bill ahead, meaning my bill is for the up coming month not last month and the service must be paid for ahead and until the payment is received no service will be performed so if joe home owner wants to take his time sending me a check then his grass is going to grow and grow until i get paid.

i been doing this for 23 years and since i been using this this method it has solved a lot of issues and at this point i am never waiting for money i allready did the work for and if someone does not pay me then its no skin off my back because the money is never a issue as long as you got nothing into it.

the only time i had even somewhat of a problem was this one customer who used to send his payment two weeks late thinking he was saving money because he thought he was knocking two cuts off the bill and the contracts i give are all inclusive so the monthly payment includes more then just the cut money it includes cuts, chemicals, clean ups, shrub trimming, pretty much every thing required to keep a property looking like a post card all year.

well between the fert and irrigation system this lawn grows 3 inches every week all season long and it never slows and not showing up for two weeks actually creates more work, but to keep a long story short he found out real quick that he was saving nothing other then making his property look like crap for 2 weeks each month.

hey, you know what? i am not bank of america i do not finance peoples lives and even though i go to theses homes every week why should i or anyone else carry these expenses for a month and if everyone billed as i do you would have a boat load of less crap to deal with and your stress levels seem to go away when your bank account is loaded before you even do the work.

a old timer once told me that, providing services without the money up front is like going to battle with a unloaded gun, it don't do squat for you.

^nice, I like that. I can see this for mowing and shrub trims. Not so much for fert/squirts. Pre pays are optional. Christmas installs. Due after completing the job.

no, thats where you are wrong, you can use prepayment schedules for any service even as you put it fert and squirts.

if you are doing multiple applications for the season the same principal can be applied and even if you are doing a single application you say ok mrs jones if you want me to do the job then all i need is a check for such amount and i will schedule you to take care of the job immediately.

even if you are a homeowner and you do it yourself and when you go to home cheapo do they get to pay them for the product later to see if it works?
hell no, you want it you can have it after you pay for it of course.

when you order parts for your equiptment unless it is from a shop that knows you and you have a relationship with they will need a deposit first before they order the part for you, why should you do it any differently?

you are in business to make money and why should you feel that you can not bill in advance or get money up front? everyone else does, where is it written that landscapers got to front the bill for thirty days and then wait for the money after the fact.

i use this method for all my services, with the exception of landscape construction jobs and then i do 50% up front 25% at the midway point and 25% upon completion of job.

if the customer is having these services performed then there should be no problem in paying ahead rather then behind and essentialy after the first payment its just monthly billing from there and its no harm no foul unless the customer is gonna stiff you to begin with.
and as i stated in my previous post my customers get a discount for pre payment, in fact they get a discount for pre payment on a monthly basis and they get a even bigger discount for pre payment for the whole season in advance.

this method is being used by every industry and everyone except people in the green industry and thats why most guys cry that they have no money or have to chase people for their money and this very thread is proof positive as to the effects of doing it the opposite of how i described.

so if you are content to wait for your money or you feel that a 10% discount is too much to give then disregard anything i have said because 10% works out to be 10.00 per hundred and if you think 10 dollars is not worth it to avoid waiting for your money, making a bill, mailing it and then haveing to wait for it then you got bigger problems then me and frankly while you wait for your money i will be steaming full ahead with a loaded bank account.

^I'm glad it's working for you. And if that's the way it is there, great.
But, it doesn't work here.............................................. Occationally I'll get a check while visiting the lawn to do an applicaiton. And, occationally, I get pre pays for a full years service for fert and squirt. But, majority of my customers pay with in a two week period.
I collect payments for Chrismas installs after the commpletion of the job. Sometime they pay up front.
Perspective my friend, perspective.

4 years and running, and I'm doing just fine!

if waiting for your money works for you then hey great.

i been doing it for 28 years and i have not seen no other business fronting the load.
it don't matter where your from the only reason it exists is because you tolerate it and if you do good work there should be no problems with it by your customers its costing them the same as well as they are getting a generous discount, so its worth their while.

payday is friday and fridays come up real quick and often and haveing 10 guys to pay requires some good amounts of cash and as the old saying goes no cash flow no go.

80% of my customer base pays in advance for the entire season and they take that 20% discount and run and the rest do the auto pay on the credit card for the 10% discount and i take all that money and i buy all my products for the year in bulk and all my equiptment is ready to roll and 6 months payroll is sitting in the bank and the money i save more then makes up for the 20% discount i give.

i never have to say, when i get paid from all my accounts this month if there is some money left over i'll go buy that new blower i always wanted.
instead its sitting there ready and waiting and whatever it is we are ready to deal with it and its not because i am the greatest or make the most money its because of how i bill it and haveing the money in hand always allows you to always move forward which is the direction you need to go in business.

10 guys huh?
Phenomenal. My hat's off to ya.
Ideally, I would enjoy purchasing all I needed in advance. But, my cost is directly related to the size of my business, and the type of turf I manage and maintain.
Being a self proprietor, working alone has it's juggling acts of it's own with cash flow. So, I don't have to tell you what you can look forward to in the fall. Absolutely nothing if your not plowing snow,(which we don't get that much of here) doing pest control or what I've found to be my nitch, hanging Christmas light. I'm just greatful that I'm able to live and work with what I'm passionate about. Lawn care, an servicing people.
Steadly growing, not too fast, nor too slow, but, enough to keep me busy everday through out the Seasons. But, I choose, how busy, how much, and if the jobs I work will take me where I want to be. While I hear and see others struggle in the economy today, I've found I'm just too busy to see any of it affect me. When your small, your maneuverable, and quick to respond. But, when you've spent all on what you've had at the begining of the year, all you can hope for is that you've made the right decision.

hey, don't let the 10 guys fool you into thinking i am big daddy warbucks because i am not.
sometimes the 10 guys are a pain in the neck and at times its a couple guys too many but when i get three days rain i need to make up time fast to get back on track and when the customers need mulch and plants and at the same time you got to keep the lawns mowed you just simply need the manpower.

i know many guys that do it the old way with billing at the end of the cycle and i see them every year especially at the beginning of the season when cash is low they struggle to get the clean ups done and pay for the help because they do the work and then bill and because they are always waiting for the money to slowly trickle in and they never have their money all at once.

since i posted on this subject i have seen more response in regards to how i am doing it like i come from another planet and like i have some special customers or my business is too small to do that or i get paid within two weeks after i send out the bills and thats fine by me.

well, first off my customers are no different then the ones you work for and i been doing it this way since back when i had 10 customers, second, even if the customer pays within two weeks thats a total of six weeks waiting for money that stems from the first service of that cycle beginning.
third, i live in new jersey which has the highest property taxes, income taxes and cost of living in the united states and if i can do it here then no one else should have that problem anywhere else.

lastly, show me any other industry that works for free for a month until they bill for it and i'll show you a eskimo that bought a 1000 refridgerators last week and thats just not here in new jersey but anywhere in this country.

as i stated earlier, i am not gods gift the the business world and i surely do not claim to be the best and frankly i don't think anyone can but i have mentioned this here to shed some light on how well it has done for me and can for anyone else who gets with the program.
you work hard for your money and so do i and why should we be put on the back burner and come last to any other trade or industry.
i have gone to the same local food store every week for the last thirty years and i know everyone by name but they do not let me square up with them at the end of the month nor do i expect them to.

whether you work by yourself or have fifty employees it costs money to run a business and most of those costs would not be there if you were not working for these people, you need gas, insurance, payroll and all the other things related to the day to day operations of a business big or small and it adds up to a small fortune by the end of the month and if i did not do it this way i would be robbing peter to pay paul every month and most guys i know that do it the old way are doing exactly that robbing peter to pay paul.

with the economy the way it is i barely did any christmas lights this year and we barley had any snow this year so the winter months this year were very lame to say the least and if i did not do it this way i would be useing my personel money to make payroll instead of making my mortgage payments and i bet most guys out there are useing their mortgage money to finance their businesses until the customer sends the check.

yeah i got 10 guys working for me, so what its not like i sit around and collect the dough all day.
i work more hours then any of my employees and not only am i on each and every single job every time i also manage the business and do the estimates with no help from no one and come friday i have a 7,000.00 payroll and 1,200.00 fuel bill as well as the taxes related to both just from that week alone you can bet your bottom dollar i am not paying for it especially x4 until joe home owner feels like writing the check.

considering how people live double lives these days and everything isn't always as it seems and then take into consideration the state of our economy every time you go to a customers house it could be for the last time, and when the financial crap hits the fan the landscaper is always the last to know and the last to get paid and when the sheriff came by in between your weekly cuts to take the house for forclosure and you show up to an empty house and driveway then you can scratch your head wondering where they went and how to contact them to get paid.

i find it funny how i posted on this subject in hopes of spreading the good word of it helping people like it did for me and knowing first hand if you actually implemented it, even it it only helped you by 1/3 of what it did to me it would be the best decision you ever made.

so many people offer ways to help you make your business more money and save your customers money all for a nominal fee of course.
and here i am just some every day landscaper who decided to get with the program and found out how easy it was to do and improved cash flow emensely as well as was able to offer my customers a way to knock 20% off their property care costs by simply billing ahead rather then after.

think about it, for the monthly prepay by credit card on the auto pay the customer gets a 10% discount and outside of the first months payment it is just monthly billing from there, same as you.
and the other option is the 20% discount for the entire seasons pre payment in full.
the bottom line is most of my customers know i am johnny on the spot and know i am not running off with their money and they allready relize they are spending that money anyway so they choose to get it over with and skip the monthy billing crap and take the discount.
the funny thing about it is when i first started doing it i was like no ones gonna do this and when i first started i originally offered the 10% discount for the monthly auto pay and i was suprised by the response i got and was like "holy crap i think i am on to something here" then two years later i said to my wife i was gonna offer a 20% discount for pre payment for the entire year and my wife said i could see this customer or that one doing it but i don't think you will get as much response as the auto pay did.
and low and behold when i sent out my contracts the third year with the second option it was like holy shukaka, out of 100 accounts 60 sent in checks for the whole year and 32 sent in auto pay and the remaining 8 people were seniors that i worked for for a long time so i let them slide with the monthly billing like everyone else does and i even gave them their senior discount.

now some years later 85 out of a 100 prepay for the year and the remaining 15 do the auto pay including the seniors because they relized they could save money and now i still have 100 lawns and all the money is there ready and working for me.

as you get older you get more creative and now i take that half that money and roll it into 90 day money markets and collect intrest off it and with that combined with buying in bulk pre paying my insurances for the whole year when i need a mower and being able to pay cash for it instead of financing it saves me more money then the 20% i knock off for the customers.

i will end with this if you got this far reading through my endless post then i thank you for taking the time, but either way if you take my advice or not don't knock it until you tried it because never say never you will be mighty suprised if you took the time to try it and your customers response might not be what you think it will be especially when they know they can save money.