1. Welcome to PlowSite. Notice a fresh look and new features? It’s now easier to share photos and videos, find popular topics fast, and enjoy expanded user profiles. If you have any questions, click HELP at the top or bottom of any page, or send an email to help@plowsite.com. We welcome your feedback.

    Dismiss Notice

Switching From Monthly Billing to Twice-Monthly, Mid-Season

Discussion in 'Business Fundamentals' started by Frosty12, Jan 11, 2015.

  1. Frosty12

    Frosty12 Member
    Messages: 49

    I have a small residential customer base (about 20 driveways). We've had a slow winter here so far (two events for me thus far). I'm thinking about switching from a monthly billing cycle to a twice-monthly (every two weeks) billing cycle. This would be mostly to solve some cash flow problems during slow stretches, but I would sell it as a way to not hit customers with big tabs after a busy month. Question is this: Bad idea to switch mid-season? Does it seem too desperate? I could call/email each customer or just send a bill with a very brief letter explaining the switch (mostly selling them on the benefits to them of course). Appreciate any opinions. Thanks...
     
  2. quigleysiding

    quigleysiding PlowSite.com Addict
    Messages: 1,098

    Are they billed seasonal or per push. If they are seasonal they are probably not happy about paying for the slow winter so I wouldn't push it.
     
    Last edited: Jan 11, 2015
  3. absolutely

    absolutely Senior Member
    Messages: 237

    We started billing twice monthly with our commercial properties about 6 years ago and most of them love it. It is easier to remember the snow storms from a week ago rather tha three weeks ago. Some still only write one check a month but most pay before the next bill is due.
     
  4. MajorDave

    MajorDave Senior Member
    Messages: 943

    Just my 2 cents - - if you are going to bi-weekly...do it next season. Quigleysiding said it good...
     
  5. Frosty12

    Frosty12 Member
    Messages: 49

    No, this is for per-pushers only. Seasonals paid up front in November. Resi's only. Struggling to float fuel, truck payment, insurance for a whole month. I'm thinking since they haven't received a bill since early December, most shouldn't have a problem with it. Essentially, it will be a bill for first half of January, then another for the second half of January. Just don't want to come across as desperate or unprofessional...
     
  6. derekslawncare

    derekslawncare PlowSite.com Addict
    Messages: 1,003

    Got a chuckle out of your location. Welcome to the planet and to PS. There is lots of useful info on this site. As for your billing, you know your customers better than anyone. So I'm sure, that like most of us on here, you have some in the back of your mind that you already know will question this transition. I would recommend that if you were to do it at all, you start with your "easy going" clients first and send out a brief notice with the bill as to what you are doing. I wouldn't go into GREAT detail as to the fact that you are struggling to pay your bills, but would word it something to the effect of......"I have decided to transition to bi-weekly billing. This will not only make it easier on some customers to pay, as their billed amounts will be smaller. Further, billing will occur closer to the storm events, when they are still fresh in your mind, helping to alleviate some confusion as to what services were performed and when." See how that is perceived and see what kind of feedback you get (good or bad), and then you can decide whether or not to transition your more difficult to get along with customers this season, or wait until next year, when you could do it at the beginning of the season.
     
  7. maxwellp

    maxwellp PlowSite.com Addict
    Messages: 1,112

    I bill out every few weeks if it snows a lot so the bill do not get to high. They pay the same but it is a perceived thing. If I let them build up I get questions about why is it so high. So for your situation if you have some that may not like bi-weekly just don't send it to those.
     
  8. Snow tracker

    Snow tracker Senior Member
    Messages: 127

    You could mention that you are doing this new in 2015. Or say that it's been requested by some? Maybe allow people to still pay monthly if they would like. This may give you some cash flow but not make you look desperate
     
    Last edited: Jan 11, 2015
  9. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    Lets see, Your seasonals paid up front ,so no money from them the rest of the year. Poor budget planning on your side. Per push, you said its been a lite winter, so how can you bill them.? Once a month or twice,if it don't snow .no money. At most,you'll make 5-6k for the season?
     
  10. Frosty12

    Frosty12 Member
    Messages: 49

    Thanks for the input guys. Think I'll be changing to twice monthly. I will call or email most of my sketchy customers and let them know. If I come across any resistance, oh well they can stay on a monthly cycle. Appreciate the thoughts. Thanks.
     
  11. Frosty12

    Frosty12 Member
    Messages: 49

    Grandview, to clarify, I have a push on the books from a couple days ago as well as one coming tonight. Not sure why you decided that you know enough about my financial situation to say that I made poor budget decisions and be able to tell me my estimated revenue for the season, LOL. But thanks for the input anyways bud. Was simply looking for opinions on switching the frequency of the billing cycle mid-season, that's it.
     
  12. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    I see a lot of guys like you. You said you had about 20 driveways so half are paid in full so at 4-500 that's 4-5k for them and the rest are per push. So the other 10 you make 40-50 a push? So you did 500 to bill out. All with no disrespect to you.
     
  13. Frosty12

    Frosty12 Member
    Messages: 49

    Five were pre-paid. 15 accounts are per-push, plus I do some residential and commercial subcontracting work for a friend. Not sure why any of this is relevant, though. Again, was looking for input on billing frequency. Thanks anyways. :salute:
     
  14. Snow tracker

    Snow tracker Senior Member
    Messages: 127

    frosty. With all due respect. I believe we were all thinking what GV had the balls to say. I offered you a few ways to break it to your customers but I believe a month is not a long time to wait for payment. 20 driveways is not a full time business I would assume you have another income source??? Maybe I misread your tone in your response to GV but I think you need to learn from this mistake. You can't plan on snow. You better have a savings bad a back up plan. That way you don't need to pass on your problems to your customers. I believe this was the message GV was trying to get across. Now I am not trying to be rude to you or tell you what to do or how to run your business, please understand that. GV comments about your financial state came from the picture you painted of your self.

    I believe we all need to help each other succeed. Good luck
     
  15. Frosty12

    Frosty12 Member
    Messages: 49

    Well said and point taken. Guess I got a bit defensive. Took a leap and finally started my own business this past fall, after about ten years working for other companies. I have a limited window of opportunity to get it going and so I'm shoe-stringing it right now, trying to get through the winter and I'm aware of my lack of savings/planning for the unpredictability of the snow season. I'll admit that. Not an ideal way to start a business.
     
    Last edited: Jan 12, 2015
  16. Snow tracker

    Snow tracker Senior Member
    Messages: 127

    I totally understand. We all started somewhere and we have all had hard times at one time or another. It takes a good five to seven years for a small start up to truly turn a profit. So you will need to keep your nose to the grind stone and put multiple irons in the fire. Remember all elements of business are connected, savings, planning, marketing, budgeting. So when you ask one question it links to so many other aspects of your business.

    And yes guys will rip you up here. But if you can't take the heat stay out of the kitchen. Point is survival of the fittest in the business world.
     
  17. Frosty12

    Frosty12 Member
    Messages: 49

    Again, well said Snow Tracker. Thanks.
     
  18. ponyboy

    ponyboy Senior Member
    Messages: 957

    Why not get a credit card machine and bill after every storm
    My friend has cc #s on file and bills next day email and then day after that runs cc#
    Even in lawns he has them sign an agreement that cc get run the 3rd of every month for their service
     
  19. derekslawncare

    derekslawncare PlowSite.com Addict
    Messages: 1,003

    At the point you are in in your business (the OP not you PB) I would recommend AGAINST accepting credit cards. I pushed back for as long as I could before I started accepting them because I hated the thought of giving up 4% of everything I did to go towards the cc service fees. I now accept them, but don't advertise it to my lawn clients that I do, so that I don't have to pay the fees. The only reason I started accepting them is because I didn't want to take a $200.00 check for my roll off dumpster rentals from someone who I didn't know and then have it returned in the mail two weeks afterwards for insufficient funds. By then, I've already picked up and dumped the dumpster, so I'm out the rental as well as dumping fees.

    I know 4% doesn't seem like much, but it does add up quick and could cost you a couple hundred a month, right when EVERY PENNY COUNTS. JMO.
     
  20. ponyboy

    ponyboy Senior Member
    Messages: 957

    Agree accept it down to 2% and having the ability to have all your money in one day is worth loosing 2%
    Also switch to emailing bills will save money and get the bills out faster
    Can also look into quick books online payment another guy I know uses that