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Billing Question

Discussion in 'Business Fundamentals' started by tiedeman, Dec 17, 2005.

  1. tiedeman

    tiedeman Junior Member
    Messages: 20

    Ok, here is an interesting situation to ask about.

    Last year, 2004, I had a commerical customer sign up for snow removal & salting in August. Well, 2 months later he had an addition to his parking lot, about an extra 4 to 5 parking spaces to his already 12 space parking lot.

    I decided not to cause a big deal about the additional and how this actually should NOT be covered under the agreement since this addition happended after the fact. So since then I just have been absorbing the cost (basically not making as much money as I should) since I maintain 2 other of his properties and I didn't want to cause waves.

    But this year I decided to kind of help cover the cost I would double his salting charges without first discussing this with him. I am doing billing right now, and for salting it is about $350 more than normal.

    How many of you would still charge him double in salting even though it was not agreed apon, but he basically violated the contract by adding the additional parking lot area?
  2. PremierLand

    PremierLand PlowSite.com Addict
    from detroit
    Messages: 1,572

    If you service 2 or 3 more of his propertys, its eaisier for you to collect, right? Its also eaiser to only have to deal with one person, right?

    Well, instead of doubling it, I'd prolly only increase it 30 or 40 percent, unless your really losing money. but if its only taking you an extra 5 min and 10$ in salt and not hurting your profit much and you just want to raise his price, because you think you can, then I personally would only increase it 25%.

    hope that makes some sense
  3. Dwan

    Dwan Senior Member
    Messages: 879

    I would call him and ask? Due to the aditional cost for the exter spaces how would you like this added to your bill?
    If you just add it without talking to him first you just may loose all your work from him. You would if it was me if you did not ask first.
  4. tiedeman

    tiedeman Junior Member
    Messages: 20

    Ya, I think that I am just going to forget about it. He has been a good customer over the years, paid his bills on time and everything, and so I am just going to forget it.

    It's not like I am losing money, but I am not making as much as what I should be
  5. BreyerConstruct

    BreyerConstruct Senior Member
    Messages: 132

    My .02

    Gently ease his rate up next year. You've had him for a few years, so he dosn't sound like a jumper.
    Explain the rate increase w/ climbing expenses and the additional spaces. Just don't gouge him :)

    Been in a similar spot. I'm trying to train them to be good clients. :p

  6. Dwan

    Dwan Senior Member
    Messages: 879

    I am not saying not to raise your rate just let him know before you do so it doesn't't startle him. If you do decide not to raise it let him know that you may need to next year but this year you are going to absorb the increase.
  7. Runner

    Runner Senior Member
    Messages: 957

    For 4 to 5 spaces out of 12, if you were raising the price 20% (even though it is about a 30% difference or so), you would STILL be coming out ahead because you are already there, anyway. Also, if you perhaps add another 10% on to all the lots for gas increase, I think he would be very understanding. I sure wouldn't zap him with a 100% increase by charging him double, as you stated - especially without communicating with him.
  8. Mark Witcher

    Mark Witcher Senior Member
    Messages: 604

    You are charging $350 to salt a 16 space parking lot? :eek: I must be missing something. Is that for the whole season?
  9. tiedeman

    tiedeman Junior Member
    Messages: 20

    no, no, this is just the current bill (about 3 weeks), not for the entire season.

    Basically the guy signed up for a 3 year contract with a set snow removal price and salting price. This year is the second year of the contract.

    Each time I do salting I charge him. The $350 is more than the regular bill would be if I charged him his current rate. I am just not charging him what I would normally charge someone else because of the parking lot expansion
  10. Ken1zk

    Ken1zk Senior Member
    Messages: 193

    I would drop you like I did my ex wife! Is it possible he never thought about his contract with you when he added the spaces? This could be a simple over-site on his part.

    This is a statement from my contract -
    This agreement price has been negotiated and agreed upon based on the Customer’s Driveway/ Parking lot and walkways, as it exists on the agreement date. The Contractor, his employees, subcontractors and agents are unauthorized to perform any additional work or to enter into any agreement to perform additional work unless agreed to in writing by the Customer and Kuberski Enterprises through a properly executed change order.

    Call him and discuss this before you bill him a 100% increase.
  11. tiedeman

    tiedeman Junior Member
    Messages: 20

    Like I said, I am just going to forget about it right now. I am still getting salt at the same price last year, it's just the fact that I am not making as much as I should. I am making about 40% less than I normally would for that current size based on this years price for customers with that same size property.

    But I do maintain two of his other properties, so I don't want to cut my throat. I just thought with my opening thread remark, that by all rights I could charge him more since he change the parking lot, but also by all rights he could drop me then if he voided the contract.