Billing Lawn Care Customers in 2024
While managing customer payments and billing is certainly not a thrilling experience, it is a necessity. All business owners know that they need to bill customers, but many wonder exactly how to go about it—specifically, what method(s) of payment to accept and the frequency of billing for recurring customers.
Lawn Care Payment Options
We’ll cover payment methods first. There are plenty of ways to collect payment for your lawn care services, all of which are typically safe. Of course, there are horror stories about bouncing checks and invoices not being paid, but that shouldn’t deter business owners from accepting as many payment types as possible. If you’ve ever seen a sign at a business saying they don’t accept a certain type of payment (I.e., “No Cash” or “No Cards”), they’ve likely lost out on earning many customers’ business.
Debit Cards
Debit cards have been (since the ‘90s and ‘00s) and remain the most commonly used method of payment in the United States, with 55% of Americans using them, compared to 47% using credit cards, according to Statista data from 2023. Any business with a point-of-sale machine or card reader will accept debit cards, and if you use a mobile point-of-sale service like Square, you can take those card payments right at a customer’s front door.
Credit Cards
Arguably the safest, easiest way to pay for anything these days is a credit card. Unlike debit cards, credit card companies charge a processing fee to the merchant. Processing fees for the four major credit card providers range from around 1.5% to 3%, and while that may seem high, a Capital One Shopping survey found that 35% of Americans favored using credit cards over cash and debit cards for payments made in person in 2023. The convenience of credit card payments for customers and the amount of people who prefer to use them means more potential customers.
The additional customers businesses can gain by accepting credit card payments are bound to far outweigh the costs, making stomaching those processing fees a no-brainer. Plus, customers who may not be able to pay their invoice at the time service is rendered have the option to pay the bill later with their credit card, while you get the payment immediately.
Cash
The phrase “cash is king” may still be true for transactions between private individuals, such as buying a refrigerator or lawn mower from Facebook Marketplace, but a 2022 Pew Research survey found that 41% of Americans make exactly zero purchases with cash in a typical week. Some businesses like concert venues and sports arenas have moved to become “cashless” but still offer an option to convert cash to a prepaid card on-site.
That being said, it’s more than likely that some customers will prefer to pay in cash. Not only is it easy, but it’s also very accessible. For lawn care operators who serve homeowners, it’s important to note that not everyone has a credit card, debit card, or another payment option. In fact, the FDIC found that around six million American households did not have a checking or savings account in 2021. Continuing to accept cash helps businesses serve all customers.
Automated Clearing House
If you want to avoid any fees, Automated Clearing House (ACH) payments directly pull funds from a customer’s checking account into the business’ account. Much like employees who are paid by direct deposit, if companies have recurring customers, encouraging them to opt for ACH payments will make things easy and streamlined for both parties.
Digital Payment Options
The rise of digital payment networks like Zelle, PayPal, and Venmo has made making payments easy, too. Most bookkeeping/billing platforms like QuickBooks now offer digital payment integration, which makes sending invoices that customers can pay through PayPal, Venmo, and others possible. If you plan to accept these types of payments, your lawn care billing software will also help you track them as the IRS requires.
Lawn Care Billing Frequency
Now that we’ve covered payment methods, we’ll cover three of the most popular billing methods.
Pay as You Go
The traditional approach in the lawn care industry is to send an invoice or bill customers after each service, known as the pay-as-you-go method. Customers can purchase services as often as they wish and pay each time individually.
Pre-payment
Some lawn care companies offer pre-payment options, which involve advance payment. Residential customers and homeowners are less likely than commercial customers to opt for this method due to the large upfront cost. A discount (in the ballpark of 5%) is usually offered for a whole season’s worth of services. While this method brings in a lot of cash upfront, cash flow will be sporadic, which can prove to be problematic for making payroll and covering other business expenditures (including unexpected ones) if things are tight.
Subscription
Monthly billing via a subscription model is a great way to serve customers on a fixed schedule. Having a fixed cost helps customers build services into their budget, and the customer gets peace of mind that a professional is looking after their turf and ornamentals. It’s also a predictable source of income for the business and allows employees to build a relationship with the customer, making it a win-win for both parties.
When lawn care businesses expand their payment options, they can rest easy knowing that they’re providing the best service to as many people as possible. Plus, clear billing practices help customers understand what they owe and ensure that your bottom line is protected. Together, you have a well-oiled, easy-to-manage machine that makes it easy to get on with the most important task—taking care of customers’ properties.
