Late payment charge or not???

[Tomslawncare1]

I've been contemplating a late payment charge for customers that don't pay the monthly bill on time. At the end of the month I generate a bill of the services performed for that month. I have 30 or so customers of which 27 or 28 pay within a week or two. But there is always the one or two that never seem to pay on time. I usually have to send them a second bill. And yes they are the ones that are the first to ***** if you happen to forget something. Just wondering what you guys, gals, do. It's easy to say drop them but I'm looking for a better way so that both parties can be happy. If you think I should charge, how much should I charge? How long should I wait before I institute a late fee?

[Guido]

You have to make it legal on the bill and maybe even in the contract!

Not possitive on all the rules as far as how much you can charge and how long to give them, etc.

Check out what the bills you get say on them and you'll be able to get some ideas.

BUT I know this much, once you start it you must enforce it because once they see you don't, they'll take advantage of it like its a joke anyway.


Congrats just on getting that good of a percentage to pay on time without hassle!!

Good Luck

[Ocutter]

I would like to be the first one to stick it to those late payers with a nice late fee but you have to stay within limits. Im trying $5 for payments not received the 20th of the following month. I'll give a 5 day grace pd but thats it. The ones that were late this yr I just raised. If they dont want to pay your price hell with 'em. If they stay on more money for you. As far as being legal talk to an accountant. My builder friend of mine said hat you can tack on 1.5% (18% annualy) on the total of late bills. If you take that into account it really doesnt add up to much if lawncutting.

[landscaper3]

We also do monthly billing, we put all residential and commercial on a contract (residential has different language and process) we put on all contacts to be paid by the 15th of following month serviced, there may be a $5.00 late fee on all payments made after the 15th. Any payment that has not been paid for over 30days will pay a 10% late fee and services will stop until paid in full. if you wish other payment meathod please contact to make arrangements.
Plain and simple oil companys, credit cards, loans and more all tell you have to be paid by this date or will be charged interest ect we provide a service and should be paid on time also!!!!! Just keep your language on contract simple but direct in not to piss off your customer.

[Lee Homan]

I have a 1 customer that I picked up last year that paid in full at the end of every month and had no problem with her.

This year I gave her the option to make payments over 12 months and to this day she is 3 months behind. Payments have been cut in half you think she would be on-time.
I don't know if she thinks now that it's winter time she don't have to pay or what.

Regarding late payments, I've been considering it but not sure of the legalities. I did receive my cable bill yesterday and noticed there was a statement in it about a class action lawsuit filed against the cable company due to them charging or mischarging late fees. I didn't get into it enough to know details.

[jeffex]

raise thier cost per cut 3-5 bucks for each cut
next year if they bitz about it let them know
you have payments to make also. if they drop then
the ones that dont will be paying extra to compensate
for them same money less work its the name of the
game for one or two man shows

[GrassMaster]

Hello Everybody:

The best thing to do is like what was said above by Jeffex & next year raise them $5 or so over what you would normally raise them to, if any raise at all.

Now is not a good time of the year to try & impose a late fee. I lost a customer over that one time & never did it again. Now I wished I just would have tacked on a slow pay charge at the beginning of the next season to their monthly fee.

I even raised one extra fee because the car seemed like it was only parked on grass the day I had to mow & no other time. LOL, I watched the house & that's the way it appeared to me.

[TJLC]

I recently had a customer who was renting the house that I was mowing. I cut it twice and sent her a monthly bill as I normally do. The 15th rolled around and no money. I cut it one more time and sent out another bill with a 2nd notice past due on it. Still no money. I decide to go see her and see the house is for sale. I called the real estate company and they said she skipped out without paying rent for two months. No way to contact her. Has this happened to anyone else or was it just a stupid thing on my part to trust this woman?

[geogunn]

I had a family that was two cuttings behind and it took 4 hours to do their side of hill estate. they kept promising to pay but never did.

finally, they had birthday party for their little girl and said they would pay in full after I got done with the third cut. they did but I was mad the whole time I was mowing.

deadbeats are a real drag.

I've only been stiffed twice. fortunately, both were only about 35 bucks.

GEO

[Ocutter]

TJLC- Live and learn. One of the questions I always ask the customer is if the house will be for sale soon. I pass on all houses with signs on them. They're always looking for a scrub price for a 400k house.

[jeffex]

I was afraid to raise prices or charge more when
I first started. I didn't want to loose anyone
but as your customer base grows people seemed
impressed when your getting higher prices and it
gives them the impression that you are better.
Its real simple 5 lawns at $20 or 4 at $25 your
choice

[Nathan]

You aren't alone. There are deadbeats in everyones customer base and they become quickly evident. We charge late fees(like everyone else above). The difference is if they don't pay it, tack it on to the next month. If they don't pay it next month they now have a balance that is overdue over 30 days.
We tell everyone when they sign up about our billing policy. If balances become over 30 days past due service is terminated. Upon full payment service is restarted, with an option of charging extra for a clean up. No one likes this but it works well. If someone doesn't pay for honest work I don't want them. Don't give away your work to jerks.

[mowerman90]

I don't work for anyone without having the protection of a contract. In that contract it states that if your account isn't paid by the 15th of the month you have to pay a $10 late fee. Oh, by the way, all of my 70 accounts pay me "IN ADVANCE" for the month of service and I only accept new customers on a yearly basis. I may sound tough but I've been doing this for over 10 years and you know what they say about "once burned, twice learned". If you'd like a copy of my contract in Word format just send me an e-mail.

[jay]

I started off puting a 1.5% late charge on my late payers but it didn't seem to help as much as my 5.00 late charge fee that I use now. But some of the ones you don't want to lose thier buisness but still want to get paid I've found myself calling and reminding them thier late. I just lost a government account at a airforce base because they wouldn't pay thier bills on time and I would have to call them to remind them they were late. The secretary became upset about me calling her and finally cancelled service, Ive picked up two better accounts since then. It really pisses me off though that the government can be late with your bills or can overcharge you and give you a refund in two to three months, but when it comes to you paying on time you better have thier money there by a certain date or thier ready to take your house from you. Do any of you have this same problem with government accounts? How do you settle unpaid debts?

Jay

[jeffex]

water balloons filled with roundup!!!????
just kidding !!! a personal visit is necessary !
you can post thier realy good excuse here on
lawnsite. my worst case was a guy wrote me a
rubber check to cover 4 cuts. it took me several
visits to his business but i finally got the cash
he missed 2 meetings before he finally paid and
he acted like everything was ok now that he finally
paid. I thanked him for the payment and turned to
leave and stopped suddenly turned around and said
" you realize i'm not cutting your lawn again don't
you" He looked stunned it was a KODAK moment

[Esby]

Well sure, I only have a couple these "cronic" late payers, but they drive me crazy. I mean its understandable if you lose your bill once or maybe twice during the season, I just send you another one with the next months billing. But when its every time, they get a $10 charge. Its that simple. And to cover myself for that, I notify them dirrectly on the statement. It seems to work, but there are still those certain people.....

[Strawbridge Lawn]

I would be hesitant to add a late charge also, but have no problem in stopping service until the account is paid up to date. May mean extra phone calls or a visit. Each person just needs to find out how many servicies they want to do for free should they get stiffed.

[Twotoros]

The worst billing to collect is the last of the season. I had six slow payers this year and I finally got the last check today. I even had to explain the last bill to two them and prove it by printing out a history for their acct. and wait a while for them to figure it out. I'm afraid late charges would send them packing.

[osc]

No kidding. It is stretched out over the past 8 months and 8 grand is a landscape project with the rest being maintenance. It's kind of hard on a small biz. So far they've paid over $500 in interest. We charge 1.5 % per month and now my attorney is handling the rest. They have no complaints about the work just financial problems.

I have one other customer who got behind by 8 grand 6 months over due and the manager has given next years contract to someone else and refuses to pay the interest. She's not a nice lady.

What ever you do, have the customer sign a contract with the late charges stipulated or the interest charges may not hold up in court.