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Late Payers



FreedomYardServices: So far this year, I have had multiple customers who are late every month paying. I bill out at the end of every month and usually give them two weeks to pay. One customer went 90 days, and the others have been roughly one month behind. My question is at what point do you cut them off? Do you guys charge a late fee considering it messes up cash flow? If so, how much?

This month I stopped services to the 90-day customer as well as sent out reminders to the others and have only received two payments.

herler: I let it go as far as I am willing to tolerate never getting paid, and I don't think my tolerance levels are much higher than yours.

Caddyshack Lawn Care: As long as you're confident that they will pay, I wouldn't stress over it. If you start adding a late payment fee to the bill, you know they won't pay it and you're sure to lose customers. I'm assuming that most of your customers pay on time though.

Chineau: Do you have anything in writing setting terms (interest, payment dates)? It is best to have this in advance so you know what to do and they know what will happen. I try to get prepay for summer contracts; it cuts down on administration after you have done the work. I know every market is different, but if you want to last you have to set reasonable terms, it is your business.

32vld: I hate monthly billing for this reason. Though not all customers are retired and sitting home waiting for you to show up and get paid.

What I do with slow payers is I write balance due date on the invoices. I give them two weeks. Then send an over/past due invoice as soon as I reach the deadline date. After one more week I call them. Then I will cut them off.

Those that are scammers are then cut off before I fall deeper into their ripoff game of trying to suck in the landscaper. Lucky, I have not had one of those yet.

The honest ones and lazy ones will get that check out quickly with the past due notice.

My first monthly customer turned out to be a slow-paying commercial account; always can never afford to do more then mow and cleanups. As it was, the last week of the second month I got paid for the first month. That was unacceptable for me to do two months work before I got paid for doing the first month.

So then I sent out the invoices with the two-week due date. Then with a follow up in short order. Now they are one week late past my due date at the most.

Also, when they had a $450 snow removal bill this winter (second season doing snow for them) I got the phone call saying money was tight and they would be late before it became an issue. I thanked them for the warning and said OK to be late with that invoice.

Hard to strike a balance between giving some one a break and letting someone suck you into deep.

caseysmowing: After this month I'm switching to payment due in 15 days after invoice. I'm still waiting on three payments from April. Still haven't deposited the checks from the ones who pay in two days.

Caddyshack Lawn Care: Good luck with that.

Seriously, I know what you're saying, because it is frustrating. But don't risk losing customers just because a few of them are late paying. When they finally do pay it's a big check and it feels good to deposit those.

The annoying ones are the ones who will mail you a check June 15 and it's only for the mowing you did in April. I've got no problem at all cutting those guys loose.

And the ones who really get on my nerves are the ones who try to explain why they're so late. "Gee, I had to pay my cable bill, my car payment, my cell phone bill ... " which makes me think, "Oh, so everyone else gets priority over me?"

"In Your Own Words" is contributed from the lawn care and landscape forum at www.LawnSite.com, which was named one of 10 Great Media Sites by Media Business magazine, and has been chosen as a winner of the Most Engaged Media Brands for 2010 by min, a firm that tracks the media industry. Visit them, and join in the discussions.