Do you ever find a lawn care customer is late on paying his bill? How do you handle this? Do you continue to service the property or do you talk to the client about it? Maybe you choose a third option of sending out a few late payment reminder letters in the mail? One member of the Gopher Lawn Care Business Forum was having a hard time trying to figure out the best way to deal with a long time customer who recently stopped paying their bills. Thanks to some good advice, this all worked out in the end.
He wrote “I have a commercial lawn care customer who until just recently, has paid me within five days of receiving their monthly statement. This customer has been with me now for over five years. They now owe for the past two months and it is making me very nervous. I have sent them a courtesy reminder that their bill is past due. I’d hate to get to aggressive at collecting for fear I may lose their business but yet I can’t afford to work for free either. I have not heard from them as of yet nor have I received payment. How should I be handling this situation?”
A second lawn care business owner wrote “are you still doing work for them? If so, why? If not, why don’t you just stop by there? I had a customer who always paid, then I mowed for 2 weeks while she was out of town and all of a sudden she wouldn’t return my messages or send payment from invoice I sent. So after 3 weeks I was in her neighborhood and just stopped by. I told her that I was working a couple streets over and wanted to swing by to see how her yard was holding up. She gave me the ‘I’ve been meaning to call you but I’ve just been so busy’ line. She paid me on the spot and since then things have been good.
A 5 year customer deserves a personal visit from you. They might be having cash flow problems. Or maybe they recently hired a new accounting person that mistakenly filed your bill without paying it.
A personal visit from you will help answer your questions. While you’re there, see if you can chat with the company president/site manager. See if you can sell them additional services for the upcoming year.
It is important to foster good customer relationships from the start and follow through on this throughout the lifetime of that customer. I make a point of doing this. It doesn’t always work but I would guess 99% of the time it does. Stopping by to pay the client a visit and see what it up may really help the situation before you start sending out nasty grams about late payments. I would also suggest should this happen in the future, even with a new client, that you should follow up within five days of billing in person. Don’t let it drag on because it will only cause more problems the longer it lasts.
During the visit be understanding and firm at the same time. If they do end up paying, explain to them that this can’t happen again or service will be stop. I have great relationships with all of my customers, but they are very clear about my payment terms. The few late payers I did have were brought into line or dropped as customers. You went above and beyond by servicing them for the past two months without payment. I would not have performed any work once they were late. I can be flexible on occasion if the customer contacts me and explains to me the reason for late payments. In your case, they have not reached out to you, even after they still continue to receive service. I might also consider making this customer prepay for any work in the future.”
Update from the business owner:
“I have learned a valuable lesson from this experience. In the future I won’t be letting them go as long as I did with out receiving payment. I added a¬† new company policy about this in my estimate form.
I took your advice and went to see them today. They said the invoices I sent got lost and they didn’t know what they owed. So I went out to my vehicle and got them another invoice for the past two months and while I was at it got them one for the current month as well. They cut me a check for all 3 months. I gave them another business card and told them if this happens again please call me.
I don’t buy the lost story 2 months in a row, but hey I got paid and I am happy I can close out the books for those 2 months.
This just goes to show you the importance of talking first before you get mad and send out late payment letters.”