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residential slow pays

Discussion in 'Business Fundamentals' started by brunosplace, Mar 9, 2005.

  1. brunosplace

    brunosplace Senior Member
    Messages: 282

    What kind of percentage of your residential customers are slow to pay (or dont) ?? Also same goes for business accounts. My wife and I are looking to expand operations for next year and are trying to decide whether to push more towards residential or to business accounts. Any suggestions??
     
  2. plowman777

    plowman777 Senior Member
    Messages: 227

    both can be slow. especially in spring. try to get caught up before winter is over cuz they dont need you any more...i have heard commercials drag things out especially if they are over budget in a big snow year. maybe not even pay the whole thing ever.
     
  3. IndySnowPlow

    IndySnowPlow Senior Member
    from Indiana
    Messages: 214

    Most...not all residential are "slow" pay for 1 reason or another. Commercial / Business accounts like all accounts can also be slow OR No pay. Write your contracts that include penalties for late payments.
     
  4. chris k

    chris k Senior Member
    Messages: 204

    I have a few residentials that are slow pay. Most pay in a week after they get the bill. If they are really behind I don't plow them. When they call and ask where we are I call them back and ask where my chek is. As far as commercial accounts, a few pay their bills only once a month and it is usually at the end of the month. So depending on when they recieve their bill I could either get a check the next day or have to wait 30 days. I have never had a commercial account not pay though.
     
  5. tessdad

    tessdad Member
    from S.E. MA
    Messages: 71

    I bought an established route with the truck this year. I had plowed roads years ago for the state, but hated the extremely slow payments.(often the last payments came through in June or July)
    I had about 35 residential driveways, and one simple church lot, I have lost a couple of customers (they were too hard to deal with) and gained a few more. I now have a total of 38. My invoices for February's work went out on 3/1/05, before I check todays' mail, (it will have 1-3 checks) I have 19 payments in hand. So, in 9 days I'm at the half way point. If this month is the same as the others, 85% will be paid before the last week, and ALL paid by the end of the month. Some customers can't wail to get to the mail box and others always pay at the end of the month. This keeps money "flowing" for the entire month.
    If you were a one or two truck fleet, doing commercial, you would have all or NOTHING. If one or two customers stiff me, it won't affect my daily life. Note, this was an established route, and the customers had already been "groomed". As I take on new work, I watch thier payments closer, so far, no issue as most of them are by referral, and are good people.
     
  6. justme-

    justme- 2000 Club Member
    Messages: 2,138

    Make sure you have late payment terms in your agreements- with late fees and intrest (the state limits the intrest rate but not the late fee...).
    I have only been stiffed by a commercial account once- never been stiffed by a residential but I do have some slow pays from time to time. Rarly do I have to execute my late fee tho. Infact I haven't had to in 3 years.
     
  7. jt5019

    jt5019 Senior Member
    Messages: 853

    Most of my residentials pay within 15 days of the bill being mailed out give or take one or two.My commercial accts are always later on payments usually within 30 days or right as im about to mail out next months bill.This year was especially bad because of all the times i had to plow.
     
  8. John from OH

    John from OH Member
    Messages: 35

    I'm going to take a different view of your question. I think you should be asking which group will allow you the opportunity to maximize your equipment and bring you the best return on investment. The lower your trigger, accounts that need salt, and accounts that need you 7 days a week will bring you the best return over the long haul. Nothing worse than having 2-3" triggers and getting a winter of 1" snows and freezing rain while you watch your competition make money and your equipment is idle. You have such a small window of opportunity to make money in snow removal and you have absolutely no control over when and how much will fall. You need to be working everytime something frozen falls from the sky. Most residentials are only going to want you on higher accumulation snows and will quickly tire of bills during a long snowy winter. Commercial, on the other hand will need you irregardless. In my market, residentials average 7 plows a year. Commercials average about 15-17 with another 30-35 trips for salting. I wouldn't worry to much about getting paid, your fair pricing and superior service should take care of that. You can always weed out the slow payers as you grow your business.
     
  9. Triton Snow Systems

    Triton Snow Systems Banned
    Messages: 79

    slow pays

    The percentage of my residential customers that are slow pay is 0%. Thats because I gave up residential for all commercial. Thats what they make snowblowers for.
     
  10. Peopleeater

    Peopleeater Senior Member
    Messages: 249

    I thought you subbed?

    I thought you said you subbed to SMG or another area management co.? So how slow is SMG in paying you? Do they pay you the full amount. If you are a sub, then you aren't dealing with customers and pay?!!? Then how can you even answer this question? Just curious.

    Jeff
     
  11. Triton Snow Systems

    Triton Snow Systems Banned
    Messages: 79


    I don't ever remember saying I work for SMG. I may have said I work for a local management service but thats all I said. But even if I did, that doesn't mean that I do residential accounts now does it. I only do commercial sites for these snow management companies. And all of my accounts are commercial.
     
  12. Triton Snow Systems

    Triton Snow Systems Banned
    Messages: 79


    Just for the record.. The snow management company that I refer to pays me like clockwork.
     
  13. Peopleeater

    Peopleeater Senior Member
    Messages: 249

    Exactly

    That is exactly what I was referring to. You are saying that your contracts (residential or commercial, doesn't matter) all pay on time. What I am wondering is how would you know this since the customers pay the snow management companies, the snow management cos. then pay you. So What I understand is that your 1 customer (snow management co.) pays on time. I don't care if you do 1000 lots or drives, if you work for snow management co., then you are a sub, and subs don't bill the customer, the contractor (in this case the snow management co)bills them, takes his cut, and sends you what's left! I sub too, and never send the school dist. a bill. I send my bill to my contractor, who would bill the schools. I have no idea if they are paid in full, if they pay a few days late, or if they pay on time or early. That is the beauty of being a sub, no worries or headaches, just no profit either. The contractors make the real money.

    I may be looking for subs next year as I am going to try and get a few places closer and on my own. I need some more equipment or will have to rely on subsfor backup, just in case. (I don't want to have to do that.) In any case, the subs will bill me, and wether or not I get paid on time, they will get theirs on time. The contractor has to deal with payment, headaches, late or slow pays, which is a good reason why they make more than a sub.

    Sorry if I made you mad, just making sure he knew you were a sub and not a contractor. And I never said you did driveways, you said you do only commercial. All I know is you stated you were a sub, which means you don't bill them direct.

    Hope that clears it up a little.

    Jeff

    PS Im sure there are commercial lots that are slow pay too, but probably more reliable than resi's. I wouldn't know for sure, though, as I am a SUB and not a contractor!!!! ;)
     
  14. Triton Snow Systems

    Triton Snow Systems Banned
    Messages: 79


    " Let me explain this post " The sites I do for a local mngt. company are all commercial. Now pay attention heres where I lost you. And all of my accounts are commercial. That means companies that pay me directly !

    But thanks for explaining to me what the difference between a contractor and a sub.
     
    Last edited: Mar 14, 2005
  15. Peopleeater

    Peopleeater Senior Member
    Messages: 249

    No Offense

    No offense intended to you. I am glad you work for yourself as well as for the snow management co. I apologize if I jumped to conclusions. Although the reason I jumped to this conclusion was the other thread, and the way it seemed you were defending or at least taking sides wth another member. Your first post there had nothing to do with the thread, so I jumped to the conclusion that you were defending SMG. I am glad you know the other member, and have friends and all, but if you have a personal question that has nothing remotely to do with the thread. "the harley quote". That is what e-mail and private messages, and phones, etc. were invented for, keeping in touch. By all means if you can't get a hold of the member any other way, then yes use the board, but start a different thread or something. SO AGAIN I SAY I AM SORRY for jumping to this conclusion. Secondly, where you said all of the contracts were for commercial for the snow co., and went on directly afterward to say all of your accounts were commercial. I just didn't see the separation in the exlpanation, just thought you were trying to reiterate that all of the accounts were commercial. For the third time, I apologize.

    Now, with my posts here, did that anger you at all? If I did, then you understand why I might have gotten a little mad at your posts. Especially when you shot back at the member "what is it to you? are you a moderator?" You shouldnt have been there, nor I here. I would have never posted here though, if it weren't for the other thread. I was just trying to find out the other side of the "story" to protect myself in the future if ever approached by them, or any other mgmt co. I was also going to relay what info I found out, but that other member says whe will explain personally on the board, but obviously has and had no intention of sharing it. If so, the member would have found the time to at least send me an email as stated they would in a few days. So i judged you by your friends actions. Didn't your parents tell you way back when you were young that people would judge you on friends actions. Well, that is pretty much what happened.

    Again, for the fourth time, I apologize for sticking my nose in where it doesn't belong. You could have just apologized to the member asking about your off topic posts, but instead of you apologizing, you snapped at him/her.

    In this post, I was jsut making sure you weren't misrepresenting yourself to the member that started this thread in case he/she wanted to make a business decision based on other members here. I agree it wouldn't be smart to make any decision,let alone a business one based on info from web, but you never know what some will do.

    I see that I was wrong, and instead of snapping at you, I apologized. I guess with all the non-snow events we have had, guess we are all a little cranky?!

    Jeff