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Monthly Contracts & No Snow Will You Get Paid?

Discussion in 'Commercial Snow Removal' started by #1 plowtech, Jan 11, 2002.

  1. #1 plowtech

    #1 plowtech Senior Member
    Messages: 253

    I just had a customer here and the topic came up on monthly contracts.

    We have not pushed a flake of snow...yet , and some monthly contracts, big or little, are not paying or paying behind.

    Do you cut them some slack and give them a reduced price to help get some of your cash, or take them to collections?

    And what about next year, will they remember you when you help them with a reduced price or take them to court to get your money?

    What would you do? PT.
  2. G.Williams

    G.Williams Member
    Messages: 40

    That is why we do not do ANY seasonal contracts.
  3. RAZOR

    RAZOR Senior Member
    Messages: 342

    We are in similar situation. We have been out twice this year.

    I would not cut them any slack. A deal is a deal. If it snowed every day 'til the end of the season you couldn't charge them any extra. You have to remember that you still have your expenses even before you go out plowing like equipment, insurance and being on call 24 \7. If you don't get your money how are going to pay your bills?


    WHITE=GREEN Senior Member
    Messages: 161

    i would expect full and timely payment from them. if not the courts will handle this for you. just like razor said if you plowed every day for the duration of the winter what do you think they would say if you tried to charge them extra??? a deal is a deal, with seasonal contracts one year you may make out great and the next not so great. all a wash in the end. but stick to your guns, they owe you!!!
  5. John DiMartino

    John DiMartino PlowSite.com Veteran
    Messages: 2,154

    I would not accept any slack,i have had full payment on mine,no questions asked,which is how it should be.After 15 days of non payment-the property wil not be plowed until brought up to date,should be in all contracts.They signed a contract,a deal is a deal,I'd look to replace those accounts for next season,or offer prepay only,since payment has been late/delayed.
  6. Kent Lawns

    Kent Lawns PlowSite.com Veteran
    Messages: 315

    They're paying to have our personell, licensed and insured equipment ready to go.

    It is unusual to have no snow like this year, but none of us know that going in.

    I don't make a big deal about it, but I do expect full payment and most customers are good about it.

    As always some customers just need to be educated. This year we've had to educate more than other years, but that's just part of the job.
  7. Santa

    Santa Junior Member
    Messages: 14

    You should get paid for what both parties agreed to in your contract. If you gave them a break for no snow last month, do you think they would pay you extra for above average snow any other month? We only service commercial accounts, and only multi-year contracts, and have never had a problem in 20 years.

    The only thing we do on a REAL LEAN snow season is to go in and maybe do some dormant pruning of shrubs or something to let people see we are there doing something, but this is NOT giving them a break on price.Once they know they will get a price break, they will never stop asking.

  8. thelawnguy

    thelawnguy PlowSite.com Addict
    Messages: 1,011

    I have had no problems yet. But my contracts also have a provision for adjustments in April (negotiated individually prior to the start of the season) if there are fewer than x number of events.

    PINEISLAND1 PlowSite.com Veteran
    Messages: 664

    I personally like to remind them that this is EXACTLY WHY I have a good mix of seasonal accounts, for years just like this. If we were strictly per push, and dont have the steady revenues coming in, then how do we pay for the insurance and permits and all the other things that set us apart from the guy next door with a plow on his truck, who will "push anything for a twenty".

    A wise business person will see the advantage of some seasonals and aggressively sell the "snow insurance" aspect of his business to his customers.
  10. GoSlo

    GoSlo Junior Member
    Messages: 15

    How many of your customers that you had last year paid you extra for all the plowing that you did. Here in michigan we plowed 23 days stright in the month of dec. No one came out and said here is extra money for plowing so much.
  11. jimsmowin

    jimsmowin Senior Member
    Messages: 130

    we've been out once and money keeps coming. a deal is a deal. if not why do acontract.
  12. plowking35

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

    First you need to call and ask why payment is behind before jumping to conclusions. Next, if it is because of no snow, remind them that winter is far from over. I might suggest that if you get to the end of the season and you have still seen very little in the way of snowfall, then suggest that the last payment, or a portion thereof be applied to next years first installment. This should help them to feel better about the situation, and should lock you in for next season as well. Above all be sugary sweet when dealing with them.Once you get your money, tell them to fly a kite if you are so inclined.
  13. Chief Plow

    Chief Plow Senior Member
    Messages: 201

    In my humble opinion, I agree with the majority, you should hold them to pay. A deal is a deal, if you were not living up to your end of the deal they would be the ones complaining. Personally, my company only has 2 seasonal contracts, I prefer to charge by the push, where I live it seems to be you are better off that way. Only my opinion, and my wife would be the first to tell you I'm not perfect...Lol

    Take care all,
    Chief Plow
  14. jackfrost

    jackfrost Junior Member
    Messages: 22

    I agree with all of you also but personally I would cut some slack with residentials depending on the situation,for example some elderly wait for there soical security checks you may have to give them a few more days,that will appreciate it in the long run,as far as commerical lots go,they get no slack,when theres no snow on the ground there bussiness is taking in money all day,there running a bussiness just like we are.They have expenses just like we do.So in my new plowers opinon no slack at all!

    97 ram 2500,cummins,8'2"boss v plow
  15. GeoffD

    GeoffD PlowSite.com Veteran
    Messages: 2,266

    We have had a light winter so far. I bill for 100 % of the contract price. You need to maintain a cash flow. The plowing business needs to support it's self. It can't suck off another business to stay alive. If plowing doesn't stay sell supporting then i need to change something, or get out of the biz.


  16. plowking35

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

    Exactly what Geoff said. With out the plowing division pulling tis own weight , then why keep it going.
  17. greenquestlawn

    greenquestlawn Senior Member
    Messages: 157

    Remember there is 9.5 weeks of winter left.

    I personally do not have any contracts this year only per push accounts. This is just what people want by me. I would hold them to the contract. What happens if you give them a break and then you get nailed with snow. Will you charge more then?

    OBRYANMAINT PlowSite.com Veteran
    from ohio
    Messages: 534

    no slack here either.......maybe this customer does'nt deserve the opportunity to be on this type of payment plan.........
  19. timm9

    timm9 Senior Member
    Messages: 168

    Why not make it worth their effort to pay the full amount up front as in a pre-season discount. If not paid in full by a certain date then the price goes up. If not paid by the first snow then it's even more. Before my plow contractor retired and I bought 2 trucks, that's the way he did it. It helped him know early on how many of his contracts would renew and how many new ones he could take. Especially the commecial accounts, for their tax planning purposes it's a "no brainer". Being self employed for 24 years I love being able to pay tax deductable expenses in the fall that continue to give me service into the next year while still writing it off.

    Don't feel bad about no snow. Had three storms in 10 days that left 20+". Was so swamped decided to spend $19,000 for 2nd truck and V blade. The day after new blade was installed the sun came out and it's been 3 weeks with nothing but sunshine. Go figure....
  20. ceaman

    ceaman Senior Member
    Messages: 372

    I made the offer to a few accounts this year to go for an annual contract. Everyone here (except for a few large propertys like GM, Chrysler, & RCA) dont believe they would bennifit. When is the best time to convince them of this after a extremely rough winter? How would you go about bringing people to want this kind of contract?