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3 Ways to Reduce Unpaid Lawn Care Invoices

Posted by WintacLawn on Aug 19, 2015 7:30:00 AM

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Steady cash flow is one of the biggest challenges that lawn care business owners face. Some estimates say that revenue issues lead to 61% of small business failures — and unpaid invoices can play a big role in that.

Unpaid lawn care invoices make it difficult to budget for expenses, drive up the cost of doing business and deplete your business’s savings. It takes a lot of time and energy to follow up with non-paying customers, too.

There are a number of invoicing methods to reduce unpaid lawn care invoices for your business. Making it more convenient for your customers to pay and standardizing your invoicing system can help. Here are three tips to get you started:

1. Accept Digital Payments

For years, customers preferred to pay for lawn care services by check, but that’s not the case anymore.

Checks accounted for 58% of all noncash transactions in 2000 — by 2012, however, checks accounted for just 14% of them. Today, credit or debit cards are used to make 60% of all noncash transactions in the U.S., a Federal Reserve payments study found.

Lawn care business customers prefer electronic payments — and debit cards in particular — over cash and checks. That’s especially true for transactions that are less than $500, according to the payments study. That could explain why some of your customers may prefer to write one check for two or three invoices.

Accepting electronic payments will make it easier for customers to pay, which will lead to fewer unpaid lawn care invoices. Also, accepting electronic payments means fewer trips to the bank, and more time enjoying your own back yard.

2. Stay on Schedule with Your Invoices

The faster you send invoices to your customers, the faster you’ll get paid. Don’t wait until the end of the week or month to send all your invoices at once, send them right away.

Most business owners allow a 20-30 day grace period for their customers to settle bills after an invoice has been sent. And, if you do lawn mowing or landscaping work for a local business, you’ll probably wait even longer. It takes businesses an average of 41 days to pay invoices, according to one study.

If you wait a week to send an invoice after a job is completed, you’ll just have to wait an extra week to receive payment. And, in general, it’s harder to collect payments as more time lapses.

Also, make sure your lawn care invoices are clear and easy to understand. For landscaping customers, that starts with drafting a clear proposal that lays out project costs and timelines. Those details should be reflected in your invoice, along with any work order changes. Itemize expenses for tasks like lawn mowing, mulching and landscaping.

Other critical details should be spelled out so your customers know exactly when payment is due, and how to render it:
  • How to make payment
  • Your contact information
  • Payment due date
  • Itemized summary of work completed

3. Following Up on Unpaid Invoices

You don’t have to let the entire grace period lapse before you follow up with your customers on invoices. In fact, it’s better to maintain steady contact with them.

A few days after sending an invoice, call your customer to see if they’ve received it, and if they have any questions. These check-ins will draw your customer’s attention to the unpaid invoice. They’ll also help you build a personal relationship with your customer, and people are less likely to not pay a friend or acquaintance for services.

Using an invoicing system that sends automatic alerts for you to follow up with customers after a certain number of days will help you stay organized. It’ll also make it easier for you to track paid and unpaid invoices over time.

Do you have any tips to reduce unpaid lawn care business invoices?

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Topics: Service Contracts