When Should You Invoice Your Lawn Care Customers?
Examining your invoice timing is essential for maintaining a healthy cash flow.
Although your initial interest in starting a lawn care business may be connected to a love of landscaping or working outdoors, getting paid is obviously key to staying in business! In fact, you might be spending just as much time crunching numbers and making sales than actually tending to people’s lawns.
You know the goal (provide a great service, collect payment), but the reality is that an inefficient invoicing process can sometimes slow down your cash flow. Nurturing a healthy cash flow is what’s going to help you get through your busiest seasons, and ensure that your business stays afloat.
Poor cash flow can put both young and more seasoned businesses in jeopardy; it’s a major reason why 25 per cent of businesses fail in their first year, and why more than 50 per cent of businesses don’t make it past year five.
In the lawn care business, when it rains it pours (quite literally!), and your team is so busy caring for your customers that an inefficient invoicing process can allow balances and payments to slip through the cracks.
We’ll go through three ways you can approach lawn care invoices and prevent cash flow issues from arising. But first…
A Reminder About Customer Service
Although your customers know they owe you payment for a job well done, it’s important to be professional when asking your customer for money, whether by phone, email or in person. A nice interaction and proper invoicing etiquette goes a long way in encouraging a customer to repeat business or recommend your services to a friend.
And remember that payment is just one part of their customer experience. We’re covering invoice timing in this article, but it’s important to ensure that the entire process is as smooth as possible. Make everything easy—from setting up the appointment, to showing up onsite to carry out the work, to making payments.
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1. Invoicing After Each Job
Collecting payment after each job is good for cash flow because you immediately have the money in hand.
This approach makes sense if you’re collecting payment less than once a month. For example, many weed control applications happen only a few times throughout the year.
Also, if you’re a relatively new business and you’re still growing your customer list and recurring appointments, this approach helps you maintain a healthy cash flow. In this case, you’ll want to concentrate on upselling your services to clients and creating more recurring work. Recurring work means more work and money from a smaller number of clients. In addition to being efficient, it allows you to more securely estimate upcoming jobs and revenue.
However, when it comes to invoicing after each job, the trade off is more paperwork, adding to your admin time. It can also annoy customers to receive four invoices in one month if you’re invoicing them after each weekly lawn mowing appointment.
Conclusion? Sending lawn care invoices out after each job is best for new businesses and jobs that are spread out. Recurring jobs that require multiple visits each month create more admin work for you and annoy your customers.
2. Invoicing Monthly for a Flat Rate
You might snag a lawn care contract that warrants a flat rate paid to you in exchange for maintaining a large space or multiple properties.
It’s best to reserve this billing method for large maintenance contracts only, so that the higher rate allows you to ensure a profit no matter the weather and maintenance requirements that month. Spending the time crunching the numbers to determine a rate that’s both fair to your customer, but takes into account the potential for a busy month for your team is important when setting monthly flat rates.
The upside of sending out lawn care invoices out for flat monthly fees is less paperwork and admin time, but a potential problem to be aware of is that clients may start asking for additional services that are outside of your original agreement. This is why it’s very important to itemize what services are covered in your contract. It’s one thing to take on an extra task as a favour, but if a particular task arises repeatedly, you can talk to your customer about modifying your contract to include the service.
3. Invoicing Monthly Per Visit
If you have a solid list of recurring clients ensuring a healthy cash flow, this is the best way to send out your lawn care invoices. Compiling the charge for all of your visits into one invoice requires much less paperwork than invoicing after each visit. It’s also easier for both you and your customers to ensure one invoice is paid, rather than sifting through multiple invoices each month.
Quick tip: don’t get into a habit of bundling four weeks’ worth of payments together to represent a month’s work because you don’t want to let a charge for work done outside of four weeks get lost. Jobber’s batch invoicing feature helps keep track of completed jobs requiring invoicing so that you don’t miss any—even at the height of your busy season.