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Customers who pay, but pay late.

Discussion in 'Business Fundamentals' started by CashinH&P, Feb 8, 2015.

  1. CashinH&P

    CashinH&P Senior Member
    Messages: 448

    Recently I have my business has about doubled. With all the new work my girl friend is now a full time office manager. I always would bill when I had some time and my cash flow was awful. We are now billing biweekly and for the most part our customers have been awesome with the change. I have a few customers who, in the summer will bring a check out to me when I am mowing. Last winter he would do the same and if I plowed and he wasn't home I would send a bill. It always takes him for ever to pay but he does pay. Now he has an out standing balance from 1/9-2/2 of $105. Now he is a great customer and has us do everything, mow,mulch,clean ups, and plowing. Invoices are net-15 and I am sick of waiting for my money. If he wasn't a good customer I would drop his a$$, I am not in the position to loose work but this is starting make me mad. what would you guys do?
  2. seville009

    seville009 Senior Member
    from CNY
    Messages: 699

    If it's net 15 days, it's only been six days since 2/2. In the end, if he's a good customer and eventually pays, I wouldn't worry about it.
  3. CashinH&P

    CashinH&P Senior Member
    Messages: 448

    Yes it is only 6 days from 2/2 but from 1/9 its over 30 days and thats what bugs me. I know its not much money but I hate working for free...
  4. edgeair

    edgeair Senior Member
    Messages: 597

    Many people follow a monthly billing system better than a biweekly one so that may be part of it, but if you are Net 15 he still has time to pay if the billing was for up to 2/2. If he is a good customer, then you have to be a bit flexible.

    When I first read your title, I though maybe this forum was about someone who is months behind, not days. Many of us have that problem, so I wouldn't be too upset over a hundred bucks thats not due yet.
  5. edgeair

    edgeair Senior Member
    Messages: 597

    Thats how a Net 15 system works. It starts the day you invoice. Its not his problem that you invoice that way. If you want/expect to be paid at time of service, you would be outside the norm in this business.
  6. gc3

    gc3 Senior Member
    Messages: 713

    If it bothers you that bad then go knock on his door the next time your there during the day
  7. snowplower1

    snowplower1 Senior Member
    Messages: 750

    Put it in your contract that late pants are subject to 15% of Bill.
  8. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    If your conceded just trow another bill in the mail,Not that big of a deal,
  9. JD Dave

    JD Dave PlowSite Fanatic
    Messages: 11,032

    If he always pays and.is a good customer I'd focus my energy into something else other then him being a slow payer.
  10. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    What the hell.

    If your concerned just throw a new bill in the mail.
  11. chevy2500meyer

    chevy2500meyer Member
    Messages: 95

    i had a customer like this who would always wanna pay me with a late check, what i mean is post dating it and the last one was for 3 weeks out. I got tired of him complaining about his yard that i was doing bad service (not cutting it short missing spots in the yard) while he would want it done every once every 3-4 weeks and bagged it. I dropped him and had another company take him on and i warned them about what he does (big local company). They called me about him not paying them, i said im sorry but he does pay but idk how long it will take. So like you CashinH&P, i wasnt gonna work for free so i dropped him.
  12. maxwellp

    maxwellp PlowSite.com Addict
    Messages: 1,112

    You say you are net 15. He has until the 17th before he is late. I see no problem. The bill was sent on the 2nd so the 1-9 date means nothing. I put Due On Receipt on all my bills and people just do whatever suits them. Can't control them. All I care is that they pay. I have one that is a big residential driveway that takes forever to pay. Last year they paid for March in July. But they alway pay up. Driveway is 75$ for .5-3 inches so there bill adds up in quick. Not going to give that up just because they are slow. If $105 is going to drive you crazy - you may want to think about a new Job. :)
  13. Antlerart06

    Antlerart06 PlowSite Veteran
    Messages: 3,437

    O my you cant live with out that $105

    Biweekly billing that sounds like a lot paper work and waste of money in office supplies

    If you cant live with out it. Then go talk to him in person.
    Or add late fee and let it ride longer he is late more money you going make.

    I have one and they are my best customer always something to do there.
    They have a 60-90 day turn a round on checks.
    Like Jan 31 I deposit Oct check Sure they running a balance of 6k now higher in summer time.
    Yes it sucks but it was agreed during contract signing and was a requirement.
    Last edited: Feb 8, 2015
  14. peteo1

    peteo1 PlowSite.com Addict
    Messages: 1,658

    I thought good customers paid their bills on time?
  15. got-h2o

    got-h2o 2000 Club Member
    Messages: 2,439

    No offense, but I'm small time and over here waiting on tens of thousands from accounts that pay net 45-60. It doesn't matter what my terms are, that's their terms. Even the net 30 day accounts are usually close to 45 or more by the time it goes through the coorporate channels. I haven't collected a single payment yet this season. But I get paid eventually so I deal with it.

    Its $105. You can legally collect 2.5% per month. But is it really worth it?
  16. got-h2o

    got-h2o 2000 Club Member
    Messages: 2,439

    Nope . Good customers pay you what you're worth.
  17. peteo1

    peteo1 PlowSite.com Addict
    Messages: 1,658

    Fair enough :salute:
  18. Mark Oomkes

    Mark Oomkes PlowSite Fanatic
    Messages: 10,463

    Whew, someone who understands it.

    Cashinwhatever, you don't get what Net 15 means. Net 15 means 15 days from the invoice date. Not from the first date of service. If you want him to pay in 15 days from January 9, you should have invoiced him on Jan 9.

    Please learn what you are asking before going on a rant about something you don't understand.

    Secondly, you say he is a great customer and always pays and you do a lot of work for him PLUS you can't afford to lose (not loose) customers. Why would you get this PO'ed about a great customer not paying in the time frame you both agreed to? Especially over $105?

    What is the cost to replace this account? More than $105. I guarantee that. And it will keep happening because you don't understand what Net 15 means.

    If you don't want to work for free, as you state, then you better have everyone pay a retainer and work off that. Because in reality, unless you are prepaid, you are working for free the second you leave that account.
  19. John_DeereGreen

    John_DeereGreen PlowSite.com Addict
    Messages: 1,717

    All this over $105 bucks, that isn't late for over another week?

    I have more than a couple clients that have 2 more zeros before the decimal point than your number hanging out there in A/R. Invoice date was Jan 1 and I still don't have money. Takes money to make money. If you can't afford to front it and go without it, you're in the wrong damn business.

    Like it or not, Net 45 is pretty typical. Especially on the commercial side. So if you see it faster than 30 days you should be jumping for joy.

    And on a side note, why da fawk are you billing biweekly? Grown so much your girlfriend is your full time office manager? We didn't even think about an office manager until we were 7 figures.
  20. I tried that and the people only tried to pay the lower bill if as the beginning of the month snowed heavy and sent bill out and then end of the month sent bill out and people paid the lower bill!! No way It was a headache....I just send out once a month....Good luck I know it sucks to wait on money...but raise your rates and find new customers....who pay....