View Full Version : who charges late paying customers?
12-22-2004, 09:04 AM
just looking for some feed back on customers who pay late. what kind of fees do you guys charge. penalties or other ways of getting payments within a reasonable amount of time. b
12-22-2004, 09:48 AM
i do its all noted in the contract 1.5% per month ( which aint sh^t but its all TN will allow) for late payment, 30 for NSF checks and anything collected throught attourney or collections is 30% of amount due plus amount due. i only had 4 late payments this year 2 from one client and 2 from another. not too bad i dont think .
12-22-2004, 10:05 AM
Hey i'm in TN. too.....I was told that the maximum amount you can charge is 24% per year. I was also told you can charge a flat rate aslong as it is in reason, please let me know if this is correct and where you got your information if it is. I need to clear this up as soon as possible ... thanks for the help.
12-22-2004, 10:12 AM
mowmoney00- when i went to have my attourney write up my contracts a few yrs back thats what he put in there "1.5% or the maximum rate permitted by law whichever is less" is what it says. he checks every yr when i go back in to see him to revise them and it hasnt changed ... 1.5% aint much i would rather have something like $0-$40 is $10 late fee $40-100 is $15 late fee 100-500 is $25 late fee etc etc i think would be better but i dont know what the law says ...... my contract has some other things in it that i can do to get them to pay... let me know if you would like a copy its in word format i dotn mind sending it over to you
12-22-2004, 10:25 AM
i plant art - Yes I really would like a copy of your contract to see what your lawyer added to yours and what mine did not. My accountant and lawyer said this ok to do....so i'm currently charging $25.00 for any amount that is 15 days past the invoice date. I trust my accountant, but my lawyer is a different story. Know any good lawyers :p . The invoice clearly states this in bold print and it also states that payment is due upon reciept of invoice. I also charge a $30.00 returned check fee. Half of my customers are on contract and the other half are "pay on a monthly basis". I'm working to convert all other customers to contracts with added services of course. Well to make a long story short..."Do you think i'm doing the right thing". Opinions needed from anyone...Thanks
P.S. i plant art...send me a PM and you can send me that contract...Thanks alot
12-22-2004, 11:49 AM
We send a Statement to contract customers on the 1st, for the prior months service. We request payment be made by the 15th. If payments are postmarked after the 15th we assess a $ 25.00 late fee. Three late fees and you're placed on a "cash at time of sale" basis. No one pays late so far. Rock On.
12-22-2004, 12:13 PM
usually after sending a threatening letter telling them that i will assess a late fee if payment isn't received in 10 days, they pay up almost every time. rarely have i had to actually add the fee
12-22-2004, 12:35 PM
21% annually or $5.00 per month, whichever is more. Starts at 20 days past due. Also, any leagal fees and collection costs get added too.
Here in OK our lawyer told us that we can charge any fair amount we want as long as we call it a service fee and not a late fee. Plus it MUST be on their original invoice that you will be assessing a service fee of $___ if not paid by the due date.
12-22-2004, 10:38 PM
Is there a big difference in the wording of "late fee" or "service fee". Did your lawyer give you an explaination on why you have to use the "service fee" words.
12-23-2004, 01:03 AM
I just had to send 3 clients to court to get paid, I added a $45.00 Administrative fee, a $25.00 service charge, for the police to serve the papers, and another $25 fee for the court filing fee. So a $470.00 bill now becomes a $565.00 Bill. Plus if they do not pay before court, I will have to demand payment for my 2 employee's wage (probably 3 hours, total of 6) on top of that if we go to court.
12-23-2004, 01:30 AM
I'm generally fair with customers and will work with them but they need to come to me and talk face to face. I'f a late fee is needed, I'll charge 3%, if there 2 months behind without paying, i stop mowing the property and give them a call and get it worked out right then, if not, then it's a letter to them, no reply, a letter from my lawyer, if still no responce, then things get ugly, and the attorney takes over for me, but I've only had to do that once, scared the customer and they took care of the payment. from then on , I've had the customer n a pay as i go basis. in short. be fair, keep your boundrys, and don't let others walk over your company.\
The lawyer said to use "service fee" because if you use the words "late fee" then you are bound to limits that the law allows under the late fee law which is like 1.5% a month.
On may bills that I receive, and probably yours too, such as cable, electric, etc, most call their fees a service fee or administrative fee, etc. Some do say late fee but most of those that do are charging 1.5%. 1.5% will not come anywhere close to covering the cost associated with sending extra statements when you include the time, envelopes, postage and everything else if the amount is small.
You may want to check with a local lawyer where you live though, since all states can be different.
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