How to get paid on time when you run a lawn mowing business.

How to Mow, Go And Get Paid On Time

One problem that a lot of lawn mowing business talk about a lot is debt collection.

I have heard a lot of stories of contractors who bill monthly. 

I even heard of a guy that was still mowing and three months behind with his invoices. He nearly went under while he struggled to get his business back on track. 

Regarding cash flow, getting paid is just as important as actually doing the job. You want sound systems in place from day one, and this post will help you do that. You need to get the customer to recognise that you need to get paid on time. 

Establish Clear Payment Terms

We talk about payment as soon as someone accepts a quote. We tell them that all payments are due within 24 hours. You can’t leave the decision of when to pay in the hands of the customer. 

The biggest problem with letting payments slide and continuing mowing in a lawn mowing business is the customer can quickly lose track of where they are with payments. 

I have had a regular late-payer customer decide that he had already paid for a mow. He was confused and had no record because he paid in cash. We knew he still needed to pay. 

We issued a collection notice, and he told the collection company that he had already paid. The burden of proof was on us, and we had none. This would not have happened if we had insisted on payment before doing the next mow. 

Set Up an Invoicing System

Having an excellent invoicing system is a good start. You could fire off an invoice for all the jobs you did that day as soon as you get in. These should really be electronic invoices that your software automatically generates. 

If you still need software that issues invoices, free software like Zoho can do this for you. Zoho won’t keep track of your accounts. You will need accounting software for that, but it’s free, and that’s the best price. 

Remember to clearly state your payment terms at the bottom of every invoice. 

We do not use invoicing in our business unless the customer requires a GST invoice. We do send out a few monthly statements, which go out with seven-day terms. 

However, We have found an alternative that works even better for us. 

Text For Secuess 

When we onboard new customers, we tell them we will text with banking information after we mow the lawn and payment is due straight away. 90% of our 150+ customers pay on the same day. This system works well and allows us to keep on top of the credit we are extending to our customers. 

Make Payment Easy and Convenient

One of the reasons that texts work so well is because we make it easy to pay us. All they need to do is jump on the computer and make a payment. If you are using software like Zoho, then you can also set up a customer portal, and they can pay through that. 

I would also like to mention that payment portals usually incur fees when someone pays you. This one thing alone will make this option less attractive to lawn-mowing business owners. 

Dont deal in cash. 

Dont take cash unless it is absolutely necessary. There are some major disadvantages to accepting cash. 

• You have no record (paper trail) of the payment.

• There is always a chance that the money could get stolen. If this happens, who is going to take the hit? You or the customer? Either way, it’s a lose/lose situation.

• You will have to make a trip to the bank as cash has to be banked over the counter or dropped in their machine. 

• Sometimes the customer will want to pay you after you have finished and you may end up caught on a customer’s doorstep instead of travelling to the next job. 

Getting Paid On Time

Offer Incentives for Early Payment

Sometimes a business will offer a discount for early payment. Due to the narrow margins, I would not recommend this for a lawn mowing business. However, there are a couple of options that may work.

A Booking fee – This is a way of offering a discount without a discount. When you present the invoice, it has a booking fee (say $5), Which can be deducted from the total if the invoice is paid within three days. Not my favourite method and is a bit fiddly, but it works. 

Late payment fee – We use this method all the time. On our invoices, we have a footer that says, “All late accounts will incur a $15 late payment fee. All accounts forwarded for collection will incur collection costs and interest.”

The great thing about a late payment fee is that the customer sees it on the invoice, so they know it’s there. They pay promptly because they dont want late payment charges. Best of all, you can charge it a couple of times and get those slow payers a bit more motivated. 

Utilise Automated Reminders.

Most software will offer you an automatic reminder option. Use it. If a customer ever contacts you and complains about the reminder. You can tell them it’s not personal. It’s automated. Blame it on the computer. We do. 

Offer Automated Payment Options.

Another good option if someone is constantly late or you want them to avoid paying with cash is to get them to set up an automatic payment. These are great, and as long as you turn up on time every time, it will work like clockwork. 

Follow Up on Late Payments.

Everybody hates debit collection, so try to avoid going down that road. When we take on a new customer, payment is due on the same day. If it doesn’t come through, we will text them 48 hours after the payment is due with this message.

“Hi, Stuart from Gecko Lawns. Payment hasn’t come through on my end for your mow on 9th 

Dec. Could you please check that and get back to me? Thanks”

Most customers will pay the bill instead of getting back to you. That suits us fine. 

Now you may be saying, “won’t this annoy the customer” No, it will only annoy the customer if it happens a lot. Suppose the customer is getting so many of these texts that they cancel; that’s OK with us. We prefer customers that pay. 

Making that call. 

If you end up having to make that dreaded call for payment. I have a way of making that go better too. If a customer is overdue and ignores the texts, I call them. Sometimes they dont answer and then pay the bill, so I dont call again. 

If they do answer, I have a way I handle these calls. I introduce myself, and then I shut up. Thats when it gets awkward for them. They know why I rang. I know why I rang. Somebody’s got to say something. That’s about when they blurt out. Oh, yeah, the money. Can I pay you on Tuesday? I say that fine, and the call ends.

If the payment comes through, that’s great. If it doesn’t, I write it off. I can be bothered chasing people for money. It’s too stressful. Remember that our terms are 24 hours, so the amount of money involved is just one mow. I won’t lose any sleep over that one. 

Use Professional Debt Collection Agencies.

I have used debit collections agencies, and I have also used the small claims court before. However, it’s only worth it to me if you are talking about a reasonable amount of money. 

A full-time lawn mowing business has a hundred-plus customers, so one customer falling over is not going to affect your finances.  

Summing up

When it comes to getting paid, let the customers know it’s important from the start. Let them know you run a tight ship the first time they are late. Start as you mean to continue. 

As a general rule of thumb, you should always keep the total amount owed to your business under one week’s worth of income. 

And if someone owes you money, dont get stressed about it. Learn to let it flow off you like water off a duck’s back. You will live a much happier life by just accepting that sometimes these things happen and moving on.