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View Full Version : how strictly do you enforce late fees?


bobbygedd
12-11-2004, 12:00 PM
right now my contracts have late fees, which are supposed to apply, after payment is only one day late. i have been using a "grace period" though , meaning if payment is due on the first, and i get it by the 5, 6th, i don't add a late fee. next season i plan on strictly enforcing late fees. i'll have a 3 day "grace period" , after that the late fee WILL BE ENFORCED, i don't care if you're the president. so tell me, how strict are your late fees, and if they are strict, do people cancel when you enforce them?

coastallandscapesolutions
12-11-2004, 12:05 PM
10 day grace period. $5.00 per month or 21% APR, whichever is higher on the 11th day. No pay no service. Simple.

grassyfras
12-11-2004, 01:09 PM
Bobby I like you.

bobbygedd
12-11-2004, 01:10 PM
how come? any particular reason, or are there many reasons?

Drew Gemma
12-11-2004, 01:24 PM
I send out all invoices the first of the month I require payment due by the 25th of the same month. Any invoice recieved after that date is late and that will be a 10.00 late fee on the next bill. I have 2 idiots that are late every month and they pay the fees everytime. Now on big installs or jobs other than mowing I go with a 5% late fee and I give 25 days from date of completion. I know I am giving a long time table to be paid but I just don't see how some guys give their clients 10 days to pay. I would tell them to get lost. So far works for me. customers really like it. I ain't went broke yet.

DUSTYCEDAR
12-11-2004, 01:41 PM
late fees r a joke for the most part
i have a bibbo that is always late but she likes to play games
i send a bill she dont pay so on the first of the next month i send another with late fee she sees the new bill and pays the old 1 with out the late fee
so i can roll over the late fee on the next bill or i can drop it i have this happen with a few of my acc. most of the time i just drop it but this was the last time i will have that problem with her she got the boot and when she ask why it is due to being late with funds every month

Drew Gemma
12-11-2004, 01:49 PM
Actually by law you have to look into the laws that your state has about late fees and charging them. Each state is different so to be legal you should look at the guidelines on what you are allowed to do. By being legal in your pursuit to get your money this will help if you have to go to court I found out the hard way. My accountant helped me fix this after a small claims court case that I lost my rear in cause of this I was ready to kill !

impactlandscaping
12-11-2004, 01:51 PM
On mowing and maint. accounts it's a $ 20.00 late fee after five days past due, plus 1.5% for administrative costs associated with collecting the bill.After 30 days ,service is interrupted, and collections proceed if needed. I am thinking of changing it to 2 dollars per day after the due date, retro back to the beginning of the month*Example*--bills are due the first of each month, client doesn't pay until the 12th. so his late fee would be 24 dollars . Landscape install billing is strictly enforced. The most we extend credit for an install is 30 days, on day 31, there is a 5% penalty fee added to the balance, sixty days it cycles again, day 61, it gets turned over to court for collection.

wriken
12-11-2004, 02:01 PM
Heres what I found out about Michigan. As of present, I don't have a late fee setup.

http://www.retailers.com/eduandevents/ask/asklatefees.html

pjslawncare/landscap
12-11-2004, 02:13 PM
Hey Bob, what do u charge for your late fee. I dont charge any, but I may on a couple next year. Rite now if someone is late by a couple days, I will call them and they always send rite away

bobbygedd
12-11-2004, 02:55 PM
i charge 3% of total bill, compounded monthly. if i need to go tou court, or send certified letter, there is a fee for that too.

grassyfras
12-11-2004, 03:11 PM
Your tough, intersting.

AEW
12-11-2004, 03:24 PM
I really have never had a problem. Not one late payment in 6 years. But I still do have a 10% late fee in my contracts...just in case.

prizeprop
12-11-2004, 03:50 PM
Customers have 20 days to pay unless a 5% late fee is charged. I usually dont charge the late fee unless the payment is not recieved by the time I write next bills( 30 days).So I guess thats a 10 day grace period.Also, if a long time customer has been a good payer over the years and pays upon receipt of invoice every time, If they are late for some odd reason that one time, I let it slide. I basically have it in place to let the new customers know that THEY JUST CAN'T PAY WHEN THEY FEEL LIKE IT, OR THE LAWN GUY GETS PAID AFTER EVERYONE ELSE DOES. Once you have trained your customers, no more problems.

Lawnkeeper
12-11-2004, 05:21 PM
I don't charge late fees like some of you. I take total cuts and divide by how many months I am cutting. If someone does not pay by the due date I simple stop all service. I am way ahead of the game, they have in fact prepaid a small part of the year after the first month billed, March. One customer stopped paying in mid summer, I stopped service and still had over $100 dollars extra through their payments. When he calls to say his sorry he did not pay and he would like me to start up again, I ask for one more additional month to be paid before I start. Either way, I always have more money from my customers than work performed, until the last two months of the year

bobbygedd
12-11-2004, 05:25 PM
lawnkeeper, i have some also on that same plan. a 10 month payment plan. first one due march 1st. what if they don't pay the march 1st payment till march 20th?

DGI
12-11-2004, 05:54 PM
Wriken's posted article is worth a read.

You guys need to remember that your fees in the end amount to interest and are subject to usury laws.

prizeprop
12-11-2004, 06:11 PM
Wriken's posted article is worth a read.

You guys need to remember that your fees in the end amount to interest and are subject to usury laws.


Weather their enforcable or not, they get people to write checks quicker than without.And if people refuse to pay the late charge, you now know where there coming from and can end the relationship before real trouble starts. Its like an ******* meter, first they pay really late and now they don't want to pay the late fee= *******.

prizeprop
12-11-2004, 06:13 PM
Weather their enforcable or not, they get people to write checks quicker than without.And if people refuse to pay the late charge, you now know where there coming from and can end the relationship before real trouble starts. Its like an ******* meter, first they pay really late and now they don't want to pay the late fee= *******.

******= as s hole wow, they bleeped it out

Precision
12-11-2004, 07:53 PM
my late fee on mowing and related is 10% after 15 days from due date. But My clients pay 30 days ahead of service. Ex. if they start on April 01 they pay for the entire month upfront and the next bill is mailed out on the 15th due on May 01. I give a reminder call on 07 May and service is suspended on the 15th. So far only one person had to be suspended. She got one free mow, and is now curbside.

Install work, clean ups and other onetime events gets prepaid 50%. the remainder is due upon completion. A 10% late fee applies if I leave without payment. A further 10% applies after 30 days and it goes to collections with all cost paid by client.

Lawnkeeper
12-12-2004, 12:06 PM
great question, I never thought about that.

lawnwizards
12-12-2004, 07:12 PM
For the guys that require pre-pay, what if it rains all month (hypothetically)? Do you just roll the payment over to the next month and not collect from them? Or how do you do it exactly? I kinda like the pre-pay method. payup

thanks,

lawnwizards

coastallandscapesolutions
12-13-2004, 10:50 AM
Bobby, this is for you from our Lawn Maintenance proposal template:

Payment is due when work is completed. Coastal Greenscapes Inc bills monthly and does not prorate cancellations by the week. All statements will be processed and mailed on the 1st of the month. Payment is due by the 10th of each month. Any account not paid within twenty (20) days from date of invoice will be deemed delinquent and shall be assessed a late penalty fee of five percent (5%) on the balance due or $5.00, whichever is greater. An additional five percent (5%) percent late penalty fee will be assessed on any balances that are 30 days past due and will continue to incur penalties and interest until paid. This will automatically be generated through our accounting program and reflected as a separate invoice. Any collection costs including attorney fees and court cost will be the responsibility of the client.

RICHIE K
12-14-2004, 09:03 AM
Im NOT GOOD ON ENFORCING LATE FEES, BUT CUSTOMERS BEWARE MY WIFE HAS NOW TAKEN OVER THE OFFICE FULL TIME FOR ME. SHE'S A LITTLE TUFF ITALIAN GIRL WHO TAKE NO SH!T..... :angry:



RICHIE K

www.kulakandcompany.com :blob3:

tiedeman
12-14-2004, 09:30 AM
I usually don't enforce them that much. Now if it is a new customer, then yes I will enforce them. But if a customer that I have had for 3+ years I am laid back with charging them the fees. Am I being discriminate with it? yup

bobbygedd
12-14-2004, 09:47 AM
I usually don't enforce them that much. Now if it is a new customer, then yes I will enforce them. But if a customer that I have had for 3+ years I am laid back with charging them the fees. Am I being discriminate with it? yup
this is one thing i've had problems with, being called on why i don't treat all customers the same. and i will definitely be treating each customer exactly the same from now on. an example would be when you have several customers in a row, and they all talk. do a little favor for one, and the rest want that same little favor. you must have policies, and enforce them strictly with all of your clients.

Evan528
12-14-2004, 11:28 AM
Payment is due to me by the 15th of each month. I charge a late fee if they are 15 days late. I am not a strict as I would like to be. I find myself not charging the late fee to customers I like or once in a while late payers. Like others I also have those clients who get a late fee every single month and pay it like idiots.

Rougher83
03-17-2005, 10:53 AM
My question is why are asking this when you have already stated in multiple posts your hard line no nonsense policy with late payers and deadbeats? See quote below from 1 of your previous threads.


right now my contracts have late fees, which are supposed to apply, after payment is only one day late. i have been using a "grace period" though , meaning if payment is due on the first, and i get it by the 5, 6th, i don't add a late fee. next season i plan on strictly enforcing late fees. i'll have a 3 day "grace period" , after that the late fee WILL BE ENFORCED, i don't care if you're the president. so tell me, how strict are your late fees, and if they are strict, do people cancel when you enforce them?

bobbygedd
03-17-2005, 11:01 AM
i know what i do, i like to hear what others do

Rougher83
03-17-2005, 11:03 AM
Fair enough!

Lux Lawn
03-17-2005, 11:08 AM
Last year I did not enforce my late fees like I should have,the people who are typically late yea they got charged every month I would give a 3-5 day grace period depending on the customer.This year I am going to enforce this policy better...Maybe give 3 days grace and then everyone get hit.Late payments are not something I like to do but they need to be there to protect yourself from being taken advantage of.

idugaholez
03-17-2005, 11:48 AM
I do have a late fee built into the contracts, for lawncare and landscaping. I basically use it as a first step. I got totally screwed over on a $60k landscape job. I thought my contracts covered late fees, and all of that stuff. Found out that they were not worded properly. So far, if $4k in the whole for legal fees, and he still owes me $26k.

Lesson learned. Now, still depends on the customer, but i do use a late fee. If it is a first time being late, and i get it shortly after, I'll drop it. However, if i dont get paid soon there after, it now goes to my lawyer, where he'll file a lein on the property, and file suit, keep in mind, all at their cost now...