How much % is acceptable for late fee

Discussion in 'Business Operations' started by Lawn-Sharks, Jun 4, 2008.

  1. Lawn-Sharks

    Lawn-Sharks LawnSite Senior Member
    Posts: 912

    I have never charged a late fee but with the way fuel prices & business expensives are headed my business needs to be paid on time. I have informed all of my new customers when they sign a contract for my services that i bill on the 15th of each month and that they have till the 4th of the following month to pay otherwise i will have to enforce a late fee, i have had no problems with exsisting customers but i have had almost all of my new ones late their first month. I was woundering what people in here think is a fair % to charge for a late fee or should i charge a flat rate??? any positive imput will be helpful Thank you!:usflag:
     
  2. k911lowe

    k911lowe LawnSite Senior Member
    Posts: 526

    good luck,i have never been paid a late fee.tried it when i started but didn't get it and lost the customer.just be happy they pay you.my opinion of course.
     
  3. SilkKnitter

    SilkKnitter LawnSite Member
    from Zone 5
    Posts: 57

    What exactly does your contract state? By giving people a 2.5 week grace period is just stupid btw. when it comes to the late fee always remeber that you are not a credit card company. do not charge like you are. I would say about 5% for the late fee, but, if you want to be a d*ck you can always charge something like $5 per day or something like that. You NEED to put the late fee charges in your contracts!! one said contracts are signed then you have a leg to stand on. Remeber you are a business not just the guy that cuts grass. These people wanted a pro, that is you. If you need help just PM.
     
  4. Flow Control

    Flow Control LawnSite Bronze Member
    Posts: 1,267

    We charge a $25 admin late fee, no problems over the last year since we started.
     
  5. kleankutslawn

    kleankutslawn LawnSite Bronze Member
    Posts: 1,185

    you have to be careful with late fees,in my state you can't charge whatever you want
     
  6. Lawn-Sharks

    Lawn-Sharks LawnSite Senior Member
    Posts: 912

    First of all a grace period is the time you have after the bill is due! i bill on the 15th of that month for that month which means im billing them before the work is complete (not stupid)and yes i give them an additional 4days to pay, but not only do credit cards companies charge late fees, i get charged late fees if i dont bring movies back on time or if i pay my gl insurance late or my electric bill & my water bill & my gas bill & my cable bill Ect. The world seems to revovle around late fees so whats a better reason why we cant charge them other then im just being a D*CK??? The reason i asked is my contract states their would be a 3% late fee added to any late payments recieved after the due date and i wanted to get peoples imput on a % rate with out having to give away to much info. (you know checking to see if im being fair about my % rate) But thank you for your useless imput.
     
  7. Lawn-Sharks

    Lawn-Sharks LawnSite Senior Member
    Posts: 912

    Were in the same state. Besides i have never to this day ever charged a late fee to anyone, I just fee that if i did maybe they would motivate them to pay ontime. Its just a thought that has never been an action.
     
  8. crazyman

    crazyman LawnSite Member
    Posts: 13

    I charge 10% of balance for late fee they pay it when they are late
     
  9. BCFLawnLandscape

    BCFLawnLandscape LawnSite Senior Member
    Posts: 333

    by law if you bill 30 days of service they have 30 days to pay you. I charge a 10 admin late fee plus 1.5% on all invoices over 30 days late
     
  10. DiyDave

    DiyDave LawnSite Bronze Member
    Posts: 1,695

    You need to check the maximum interest rate that your state allows you to charge. If you charge over that rate, and the case goes to court, you will collect 0 % interest! Judges don't take kindly to those who charge Usurious rates.
     

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