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Collecting in advance?

Discussion in 'Business Fundamentals' started by digger242j, Oct 1, 2002.

  1. digger242j

    digger242j Senior Member
    Messages: 672

    I did an brief search and couldn't find any reference to this...

    A customer owes us $350 from last year. We considered trying to collect, and simply non-renewing their contract but another thought has come to mind. We'll offer to renew the contract, with the stipulation that they pay up now, and pay a "retainer" of $500 toward this season's billing. Once we get near the bottom of that retainer they advance some more, or we suspend service.

    Anybody ever tried this? Have any success?

    I don't think they'll go for it, but it's a nasty site and they might have trouble finding someone else. If we were sure we'd get paid we wouldn't mind keeping it because it's close to some of our other accounts. (If they do get somebody else you can be darn sure that the first time I see the truck there I'll stop and warn the other contractor to keep after them for their money. If you're bidding on a day care center in the south hills of Pgh. PM me and I'll tell you who if it's the one....)
     
  2. plowed

    plowed Senior Member
    Messages: 344

    digger242j - sorry to hear that you are still owed money. Just a word of caution if perhaps you do see another contractor there...You need to be careful what you say, or they can get you for slander. This is the same if a company calls for a reference on an old employee. Even if you give a stellar recomendation and have not one bad thing to say, that former employee can sue you for slander! Be sure to do all references, etc in writing only. Ridiculous I know! My point is that if you do meet up with another contractor and tell him that these people beat you out of $350, they can then sue you for slander.
     
  3. Mick

    Mick PlowSite.com Veteran
    from Maine
    Messages: 5,546

    While that's true that they could sue you for slander, they would have to prove what you said isn't true. Also, I doubt if anyone who couldn't afford to pay $350 owed could afford the lawyer to sue you.
     
  4. Garagekeeper

    Garagekeeper Senior Member
    Messages: 459

    We started to collect a non refundable payment for "6 plowings" over seven years ago. Which has worked our good for us in as far as we are not having to worry if and when we are going to be paid. We did not have any customers not sign back up when we started doing this either. It's also nice to know that you'll have the funds to cover the insurance and equipment service and upgrades that you had to make to be ready for what ever the season brings.
     
  5. landman

    landman Senior Member
    from NJ
    Messages: 185

    You can do 1 of 2 things here 1st when they want to renew thier contract tell them about the past due balance and that you have a policy that all past due balances must be satisfied before you sign another contract, then tell them that as soon as you receive thier payment and apply it to the past due balance you will send them a new contract. In turn when you recieve the check, call the bank verify the funds and if it's good, drive as fast as you can to the bank deposit or cash the check and then in a few days send them a certified letter (then you can't be held responsible in the future) and say you appreciate the payment but due to their past payment history you cannot service thier account. May seem decieving but on the otherhand they also said they would pay on time and decieved you. Or if they are desperate to have you plow tell them you need full payment on the past due balance and a retainer fee for the upcoming season, and let them understand that it's due to the past payment history and if they continue to make timely payments on future balances then there will not be a need for a retainer fee in the future.
     
  6. Pelican

    Pelican 2000 Club Member
    Messages: 2,075

    Digger, that's the way I'd run that account too, I think you're in the driver's seat. I'd raise the rate to cover the additional paperwork/bookeeping involved too. It ain't worth doin' if you're not gonna get paid!
     
  7. digger242j

    digger242j Senior Member
    Messages: 672

    Well, I think that's the only way we'll be doing them this year.

    I wondered if anyone else had ever been able to get a slow paying customer to go for such an arrangement.

    As far as the slander question that was raised, an experience some people who were close to me a few years ago had, educated me to the standard applied in alleged cases of slander-- "the truth is the ultimate defense".
     
  8. Pelican

    Pelican 2000 Club Member
    Messages: 2,075

    Yes, I have, it was the customer's suggestion. It was just a small residential account, and the paperwork just got to be too much for the trouble, so I dropped it. Your situation might be worthwhile, but I'd make sure to include compensation for the extra bookeeping.
     
  9. lalexopoulos

    lalexopoulos Junior Member
    from Pa
    Messages: 3

    people not paying

    I am sorry to hear about non payment. if there is one thing that pisses me off about people is when they can not respect another mans labors. I have been fortunate and have had no problems. In fact I am looking forward to this winter, I hope we get snow. I just bought a Fisher X Blade, minute mount 2.

    Anyway, I often thought that if that was to happen to me, I would clear their lot one more time so that they would never forget me. I would clear all of the snow right to their front door and allow enough snow to close up any other entrances. I'll be damned if I let them get the upper hand. You see, the trouble with lawsuits for collections is that you can sue and win, but you can't squeeze blood out of a turnip. If they have no shame and don't pay you, what makes you think they will keep a judges orders. In the mean time, you are stuck paying they costs until it is over, and than you may not ever get your money... so what for... to say you won a law suit?

    Good luck my fellow snow plower. But that is wht I would do and enjopy every bit of it. Last year I was asked by a church to ploow under a car that was doing donuts dangerously close to parked cars, I had a blast! You should have seen the punk digging! I stayed back and watched.
     
  10. JCurtis

    JCurtis Banned
    Messages: 862

    A CHURCH ASKED YOU TO DO WHAT !!!!!!!!!!!!!!!

    Thats not very brotherly of them...

    Vengence is Mine sayeth The LORD!!!!!

    Except I guess if you can ask a plowguy to plow someone in:D

    Isn't that fun!!!! I have plowed people in on my own for various reasons, but never had a church ask me to do it.

    :eek:
     
  11. Pelican

    Pelican 2000 Club Member
    Messages: 2,075

    lalexopoulos, Welcome to Plowsite!:drinkup:

    Here in NY, the defendent is liable for all court costs if you win your suit. Then, if he still refuses to pay, after 30 (or maybe 60, I don't remember) days, you can file non-payment with the Sheriff, and he will sieze assets to pay the debt.

    I had an account once who refused to pay, won a judgement, and the guy thought he'd be wise and ignore it. I filed with the Sheriff (I had the guy's bank account info) and the Sheriff went in his account and took the money. The bill was for $240, it cost the guy over $500 with court and collection fees added. That felt pretty good, and I got my money!
     
  12. Taconic

    Taconic PlowSite.com Veteran
    Messages: 180

    In New York State it is illelegal to bounce a check so it is easily remedied by calling the sheriff or the town police department as they will go after the money owed with a vengence.
    John Parker
    845-485-4200
     
  13. Pelican

    Pelican 2000 Club Member
    Messages: 2,075

    Justice in motion...

    A bit off the original topic, but an example of what we've discussed:

    Last month I had filed a small claims suit on a delinquent lawn account, I was to appear tomorrow evening. Yesterday I got a certified letter notice, went to the Post Office today to retrieve it, and lo and behold, a money order for the full amount, plus interest and court fees. I had made three previous attempts at collection prior to filing with no success. The only thing I wasn't compensated for was the twenty minutes it took to file the claim.

    I won a law suit!:D :drinkup:
     
  14. chris k

    chris k Senior Member
    Messages: 204

    Forget about getting the customers that only owe you money to prepay for the season, try to get them all to prepay. You have to spend the money for 4x4, the plows, sanders, etc even if it doesn't snow. We just started doing winter prepay this year and we have had about 30% prepay already. Not to bad considering we had hardly any snow last season. Good Luck.
     
  15. timm9

    timm9 Senior Member
    Messages: 168

    All of our residential contracts pay in full up front. The "one shots" or occasional phone in requests pay at the site or can be billed. One once asked what would happen if they did not pay. I told them, "I can always come back and put the snow back in the driveway."
     
  16. chtucker

    chtucker Senior Member
    Messages: 618

    There is trash service around here that advertises

    "Satisfaction Guaranteed or TWICE your trash back!" The Vail Honey Wagon trash service.
     
  17. Acorn

    Acorn Senior Member
    Messages: 103

    All my accounts are paid in advance. 50% by the end on Nov and 50% by the end of Jan. No money ... NO PLOW FOR YOU!!! like the Soup Natzi on Seinfeld
     
  18. Got Grass?

    Got Grass? Senior Member
    Messages: 641

    Sign on early I ask for 1/2 up front & a 1/4-1/2 pament in dec. & Jan. Sign on after the season started 100% up front. No one has questioned it. Pretty must standard to ask for 50%-100% up front on a flate rate contract here.
     
  19. Mark Erpelding

    Mark Erpelding Member
    from indiana
    Messages: 34

    If it wasn't a good job anyway why would you want to do it again especially if they don't pay!!!! I would wait for a good late night snow fall ad go by and plow the enterences shut.
     
  20. wyldman

    wyldman Member
    Messages: 3,265

    Most of our new customers are pre-paid,some older ones have terms,but I always get enough up front to cover some of the work.Then if they don't pay,service stops,but at least I'm covered for some of the work we have done.We also have a clause in our contracts in which we will return any snow removed due to non-payment.I have used it once,and they payed the next day.

    Credit cards,and debit,as being discussed in another thread,are a great way to avoid this as well.We are not banks,or lending institutions,so put it on their card,and let the credit card co. go after them.All new accounts must have a credit card on file so we can charge them if they don't pay.