Do you bill your lawn care customers monthly?

When it comes to when you should bill your lawn care customers, there are many variations as we will see from this discussion on the Gopher Lawn Care Business Forum but there is one important lesson to learn. The faster you are paid, the better it is for you. If you can get paid before your work even starts, that is ideal. No matter how good you think a customer is, they become a liability if they can’t or won’t pay their bills.

One lawn care business owner wrote “if you have your lawn care customers on an annual contract, do you bill them monthly and if so, do you ever bill for the previous months cuts or are they always billed and paid prior to cutting?

I was thinking for customers who sign at least a 3 month contract, that I would bill them at the end of the month and have it due by the 10th of the next month. Would this be an acceptable way to go or is this too risky?

Lawn care customer invoice.

Lawn care customer invoice.

I’m afraid of asking a new lawn care customer to pay a month in advance when they know nothing about me or my company. But I also don’t want to have to try to collect for the previous month’s service from people who have a hard time paying.
One time services need to pay at the time the service is completed.”

A second lawn care business owner said “I send out my invoices on the first of each month for that month’s service, with payment to be made by the 15th of the month. It has worked out very well and I am not out a lot of service if the lawn care customer can’t pay. I also have a lot of clients that have insisted on giving me post dated checks 6 or 12 months in advance. I really like that option. There is never an issue about whether you are getting paid. I’ve never had a lawn care customer’s check bounce either, thank goodness.

For our one time services/clients, they are billed once the service is performed and the same rules apply. They have 14 days to pay. Most of these clients want to pay once you are done anyway, so it has never really been much of an issue for me.”

A third lawn care business owner said “first off, why are you using a 3 month lawn maintenance contract? Don’t waste your time with 3 months. If you can sell them on 3 months, you should be selling them on a 12 month contract. Their property will need care all year long and you need income all year long so that works out best for both.

I use annual lawn care contracts or we collect as we mow. Annual contracts have absolutely saved my butt many times especially with the spring cash flow issues I used to have. When I ran my business years ago, we did the usual billing at the end of the month. I found though that spring was way too expensive for me by doing that. My expenses kept adding up until the money started flowing about 7 weeks later!

I think any new entrepreneurs in the lawn business NEED to look at having positive cash flow all year long by either collecting the day of the cut or collecting in advance. I have even tried billing twice monthly on the 15th and 30th, but my lawn care customers hated it. If our payments / bills crossed in the mail, they were confused and were constantly adjusting what was actually due. We did it for a few months and dropped it.

We are 100% contract or pay as you go and it has been a life saver and probably the most positive change our company ever made. New lawn companies, remember, you NEED to have positive cash flow in your business and have customers paying NOW will save you tons of issues.”

A fourth shared “last year I lost about 13% of my income because I would bill after the work was performed. The problem I ran into was, 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 knew it, they were 2 months behind, and some didn’t pay! Because of that I was out a lot of money!

This year I changed that. I bill in advance now and every customer prepays. 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 customer’s 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?

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