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Deposits from res. work

Discussion in 'Commercial Snow Removal' started by RCIPlow, Dec 3, 2001.

  1. RCIPlow

    RCIPlow Member
    Messages: 86

    Hi all,
    My commercial work pays me a retainer, that half of is credit to first snow removal. I was wondering what you all think about charging residentials a reatiner as well, like half of the cost for a push.
    Tim McGonigal
    Atco, NJ
  2. Pelican

    Pelican 2000 Club Member
    Messages: 2,075

    Good luck!
  3. DaveK

    DaveK Senior Member
    Messages: 420

    I only do residential now (and a little commercial subcontracting).
    Half the amount of the contract is due at signing (way before it snows) the other half is due by Dec. 15th.
    I had a few ask if they could pay in full when signing....... "Sure, no problem":)

    And the other half?

    I agree with pelican01, good luck. Unless ALL of it is credited towards future pushes.
    Last edited: Dec 3, 2001
  4. thelawnguy

    thelawnguy PlowSite.com Addict
    Messages: 1,011

    Most of my res are lawn customers also so for them its not a problem. For snow only residentials they pay a deposit equal to one 12" push, applied to December account balance, if no balance for December its not carried forward. Enough go for it to be fine for my business that way.

    PINEISLAND1 PlowSite.com Veteran
    Messages: 664

    I only do a couple dozen residentials now, but about 99 % of all my seasonal contracts pay up front- 100 %. Gives us plenty of early season operating capital.

    Only one residential this year didnt pay full up front, and the other option I have is 50% down, remainder paid in two more installments Jan 1 and Feb 1.

    My per plow accounts, (very few for residentials), I think would easily go for a two plow downpayment if I suggested it, but I would credit it all to their plowing charges .
  6. plowking35

    plowking35 2000 Club Member
    from SE CT
    Messages: 2,923

    Now all you need is a deposit of white stuff.
  7. DaveK

    DaveK Senior Member
    Messages: 420

    If it isn't credited towards future plowing, but simply a retainer, they are paying for nothing. Kind of like lawyers.:mad:

    New quote: "First we kill all the lawyers, then the snow plow guys" [​IMG]

    Now on very large accounts where large equipment is stored on-site........ that's different. (just so I don't get on JAA's bad side):)
  8. CT18fireman

    CT18fireman Banned
    Messages: 2,133

    For all year customers and long term plowing customers I do not see a need for it. They always pay their bills and I see no reason for me to state that I have less then full confidence of them doing so. I have the equipment that I need already paid for so there is nothing for me to justify a deposit.

    New plowing only customers are requested to pay a deposit of a full charge for their driveway when I personally meet with them at their home. I discuss my terms with them and show them my concerns as they do to me. Then if they want my service I tell them that I need a deposit from them. This is to insure I will be plowing for the year. At the end of the season, usually on their March bill, I credit their account one plowing. This way if during the year they decide to change or not to pay me I atleast get some type of payment for that month if I did plow. By billing bi-monthly for a busy winter, as I did last year, I can prevent any billing problems. I can honestly say that my cusotmers for the most part continue with me and after the first year I don't ask for the deposit.

    I don't think large deposits or seasonal pricing would work well around me for residentials. There are too many variables that could affect the price. Customers do not want to pay a lot and then not get any snow. Maybe it is different in other areas but here people are aware of the random winters common to southern New England.
  9. RCIPlow

    RCIPlow Member
    Messages: 86

    Good points guys
    I was thinking of asking for a $25.00 retainer per drive because as I have had occasion before where someone calls for a plow then cancels or has a neighbor type jack__s who does the whole street with his toro...., It gets credited towards first push. If no push, boy I hate to say that, then either carried over or refunded.
    As far as my commercial accounts, I get reatiner in August, most run $500.00, they get a $250.00 credit towards first snowfall. The other $250.00 is mine. This way has worked great and havent had any complaints. The $250 guarantees priority service on the top of the list for each truck. It also guarantees me that some low baller isnt gona take the account away.
    Heres hoping for alot of frozen and semi frozen percipitation.
  10. DaveK

    DaveK Senior Member
    Messages: 420

    I don't understand that part. If a jack__s comes along (next year) and lowballs you AND doesn't charge $250 "bonus".............
    Once the contract is signed..... it's money in the bank. You can't be lowballed after you have a signed contract.
  11. CT18fireman

    CT18fireman Banned
    Messages: 2,133

    As much as you guys love the word contract in reality there is still little gurantee of keeping the customer. Except with huge commercial accounts is anyone going to take the time to fight a contract with a customer who no longer wants service or will not pay. I never let a bill go above $500 for residentials and small commercials. I do this because I would not want to be out more then this amount if the customer decided they no longer wanted my service. I am not going to waste my time in court, etc to get the money back. In this business as with any service type the contractor takes the risk of getting burned, even with a contract. The best way to prevent this is to provide good service, to be open in relationships with customers and to be wary and up to date of bills. Fancy contracts are often not worth the paper they are written on.
  12. Rob

    Rob PlowSite.com Veteran
    Messages: 306

    I tend to agree with you CT, The contract generally would require court time etc. and unless the bill is high enough. It's generally not worth it. Keep on top of the billing and you can identify the problem accounts pretty quickly. One other comment, especially when the economy slows, it seems that the landscaper / snowplower etc. is the last one to be paid. (Can't take your service back) so it makes it that much more important to stay on top of the billing.
  13. thelawnguy

    thelawnguy PlowSite.com Addict
    Messages: 1,011

    "I was thinking of asking for a $25.00 retainer per drive because as I have had occasion before where someone calls for a plow then cancels or has a neighbor type jack__s who does the whole street with his toro"

    Exactly why I started the deposit bit with new res snow customers-got tired of showing up and the place was already done by the neighbor kid.
  14. CT18fireman

    CT18fireman Banned
    Messages: 2,133

    I know a lot of contractors that continue service even when bills are outstanding. If I have trouble with an account I stop service. I go to the account on the day of snow and demand immediate payment before anymore service is given. It is that simple to me. If I have a problem with an account then I do not renew them for the next year. Why should I struggle? I keep the accounts that keep me happy.

    OBRYANMAINT PlowSite.com Veteran
    from ohio
    Messages: 534

    i have some resi's both ways some pay full season price up front and some pay monthly as work is done on a per occurance

    either way i keep excellent communication going with all accounts that way no one is in the dark
  16. GeoffD

    GeoffD PlowSite.com Veteran
    Messages: 2,266

    No depoosits just a good contract.

    I don't care if superman came and did the drive, we will bill it even if it is done. We have a contract that states the level or services residential accounts recieve, and that amout they will pay. If they sign in they are locked into the contract.

  17. CT18fireman

    CT18fireman Banned
    Messages: 2,133

    I have the same thing in my contract that states they will pay even if done by someone else including themselves ihout calling us prior. Still I could bill them and they could not pay. The reality is there is litle that can be done to make them pay without wasting a lot of my time. Best thing is to have good relationships with your customers.
  18. casey

    casey Banned
    Messages: 180

    Alot of snow contractors around here overextend on res.
    I've heard , "I prepayed but he never showed" numerous times. I bill bi-monthly on completion.
  19. DaveK

    DaveK Senior Member
    Messages: 420

    I've heard the same thing from scam victims. One guy even put a few driveway markers in when he collected the "prepayment"
    The customer should have done a little checking, like call the phone number given to see it it even worked.
  20. RCIPlow

    RCIPlow Member
    Messages: 86

    I hear from customers in my everyday business, construction/remodeling, that guys dont show or never get back on time. Like wise homeowners have a way of changing their minds.My idea of the deposit is to show them "hey if you want me then show me" Like CT18fireman said no crontract is 100 %. I find that when someone has value in something they are less likely to chet you out of it. The other beauty of it is, that when we get a strom, we bill imediately, next day. Payment is then due on reciept of invoice. If we get another storm, and customer has not paid, then guess what? 1 phone call, if they pay we plow , no pay no plow. Had a customer last year who didnt pay for 3 weeks, had a storm, did his neighbors, he comes out asking to have his done. " Sure, no problem, heres your outstanding balance, plus this push" He paid, I plowed.

    Let it snow let it snow let it snow
    Tim McGonigal
    ATCO, NJ