did i just screw up?

Discussion in 'Lawn Mowing' started by AielLandscaping, Apr 2, 2002.

  1. AielLandscaping

    AielLandscaping LawnSite Senior Member
    Posts: 302

    ok late month i sent out a notice to all my old customers that had been paying their bills via regular mail a notice saying they would now have to pay a 7.5% late fee as opposed to a 5% late fee which they had been subjected to if they were late with their payments. when all my customers start service they are told and sign an agreement saying they understand and accept the billing terms and conditions. however i recently added into my agreement and put on the notice that i would now have a minimum late fee of $5.00... bills just went out for the first time since i issued the notice... so far i have recieve a call from a very good customer who always pays his bill but it's always about 10 days late... he told me if i didn't retract this policy (atleast in regards to him) that he'd have to look for business elsewhere... i told i'd waive the fee this month and change his due date to a day later in the month... what should i have done differently?
     
  2. Mykster

    Mykster LawnSite Senior Member
    Posts: 668

    He just might be yanking your chain to see if you'll back down on your late fee increase seeming how he's always late with his payment. Stick to your price. If he doesn't like it, drop him.
     
  3. tramahor

    tramahor LawnSite Member
    Posts: 82

    no reply, just wanted to say its nice to see someone close by, being not to many people on here from California:blob3:
     
  4. Soupy

    Soupy LawnSite Gold Member
    Posts: 3,125

    You should stick to your policy. It's ok to offer him a later due date to meet his pay period, but if he is still late after that then he deserved to pay the late fee. Now, I haven't had this problem but if a customer that is always on time and just made a mistake is late and get's hit with the late fee for the first time, calls me and says what's this I don't think it's fair that you charge me extra, your fired. I would then tell her to ignore the late fee that it was a accounting error that I would have never make my favorite customer pay a silly late fee, Please except my apolligy.

    It's not worth loseing the good ones over it. But he is probly the reason you put the policy in effect in the first place.

    Soupy
     
  5. HOMER

    HOMER LawnSite Gold Member
    Posts: 3,183

    You should look at his payment history before you charge him a late fee, maybe this is when he gets a check. I have one customer that told me her husband gets paid on the 15th and that's the check they pay bill with............I always get it on the 16th-17th of every month.

    Look for consistency, there may be a reason he can't pay like you want him too.
     
  6. ladibugg

    ladibugg LawnSite Member
    Posts: 79

    I saw in a recent post, a comment about late fees being un-collectable unless you are a banking institution. There was a couple of news wires attatched to the post about big business paying back millions in late fees . One I think was a cable company, which had collected late fees for years, and was forced to pay the monies back. I have not talked to our cpa but I will find out more asap. I have never been able to charge a late fee without teaing someone off. Go figure. :blob4:
     
  7. SCAPEASAURUSREX

    SCAPEASAURUSREX LawnSite Senior Member
    Posts: 835

    Hey , when you are late with your mortgage payment or phone bill, or any other bill for that matter do they care NOT.... If you know you are getting a bill and have made the commitment to pay it in a timly manner then regardless of when you get your paycheck the money should already be alloted from the proevious check or what ever.. It's called Budgeting... Maybe he should take a class.... Do you think He calls the phone company and says.. Hey.... Retract your late fee or I'll go somewhere else.. I dont think so... He just knows he can get away with it , cause he thinks we are some lame unorganized group of turkeys with pick up trucks... Well that s gotta change ... Stick to your policy.. I think the best way to do it is to charge a fee like $25.00 for late payment with an additional charge of 2.5% per month for outstaning balances there after.... Thats what the big boys do , so why cant we... Just have to check what the max allowable rate is for late fees , here it is only 2.5%...... That may be what the earlier post was talking about as for payig late fee money back.. It has to be a reasonalbel amount.... But They cannot , NOT let us make intersest on lost money.....
     
  8. awm

    awm LawnSite Gold Member
    Posts: 3,354

    the option of late fees wouldnt work for me.the customer would just wave the next lawncare truck that came along down.
    they wouldnt have to wait long.if u get my meaning.
     
  9. Scraper

    Scraper LawnSite Bronze Member
    Posts: 1,656

    Right on Homer...I do the same thing with my personal finances. Each has it's time it gets paid. Once you get in the cycle it is hard to break.
     
  10. JimLewis

    JimLewis LawnSite Fanatic
    Posts: 6,842

    That's a tough call. Personally, I am a hard ass when it comes to paying on time. I will get rid of chronic late payers, even if it's only 10 or 15 days late. My mortgage, payroll, bills, are all due at the beginning of the month. If I let a lot of people pay me late then I can't pay my bills on time. And if you let one, you gotta let another......And a few years ago it was just like that. Every month I was letting 20-40 people slide on paying on time and I was having to pay MY bills late. It sucked.

    So I implemented a hard line payment policy, even harsher than yours. First step was $10 late fee. Next step was telling chronic late payers they either had to sign up with our AutoPay program or we'd cancel their service. Final step was to sign all new clients up on AutoPay. And I took no prisoners. I was FED UP with people paying me late.

    I had a guy who was just like you describe. Always paid me but it was always 10-15 days late. I told him I was sorry but I needed everyone to pay on time, not late. He said he'd take his business elsewhere and I let him. We've done just fine without him.

    Now, the only people we work for are people who sign up with AutoPay or people who have a proven record of paying on time or early. And it's worked wonders. Almost no accounts receivable problems anymore.

    At least in my area, there are plenty such customers. I don't have to work for the late payers. My goal is to get the most QUALITY customers I can get and leave the problem customers for my competition.
     

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