Late Fees

Discussion in 'Business Operations' started by grasshopperslawn, Jan 14, 2008.

  1. grasshopperslawn

    grasshopperslawn LawnSite Senior Member
    Posts: 293

    Do you guys charge late fees? And if so how much do you charge and when do they accrue. I just went from $10.00 to 15.00 in late fess and I charge them when the bill becomes 15 days past due and then every 30 days after.
     
  2. Albery's Lawn & Tractor

    Albery's Lawn & Tractor LawnSite Bronze Member
    Posts: 1,674

    This past season I was giving customers 30 days to pay before charging a $25 late fee per month. I was dumb for that, this year its down to 15 days.
     
  3. Roger

    Roger LawnSite Fanatic
    Posts: 5,927

    Did many pay the $25?
     
  4. grasshopperslawn

    grasshopperslawn LawnSite Senior Member
    Posts: 293

    when do you suspend accounts
     
  5. outrunjason

    outrunjason LawnSite Senior Member
    from dallas
    Posts: 703

    Good Post. I read somewhere that we couldn't legally charge late fees. However I did this past year (2007). Did it make a difference? Well I never really charged anyone the late fee. It was on every invoice. It stated at the bottom that any past due invoice would incur a $5 penalty per past due invoice.

    I think I would say that more people paid closer to the time they were suppose to rather then letting it go 30 days or more. But also there were some that it had no affect on at all. At the end of the year those customers that it had no affect on I sent them a letter and stated that they had to pay by the end of the year or they would incur the late charge per invoice. I added it in January and they paid the $5 bucks per invoice.

    I have the same question as another. When do you suspend service. I am a one man operation when it comes to billing. Sometimes I don't even know who is past due. I have found in the past that suspending service sometimes would come back to bite me. Example: They would owe for 2 months I would suspend service they would have no service for one month and then they would pay. I would go out to mow and there lawn was way overgrown. That is where I should have stated that we would charge a fee if they get suspended but then again I don't want to loose the customer.

    On the flip side. I have had customers that we didn't suspend because we hoped they would pay sooner or later after sending invoices and they tell us they are going to pay. Next thing you know it's the end of the mowing season, and they owe about $400 bucks.

    So, this year I will suspend people and I think I will incur a fee for them to come back. I don't know what you call it but something like if your electric got cut off and then they charge you a fee to come out and reconnect it.
     
  6. gringo gardener

    gringo gardener LawnSite Member
    Posts: 95

    fore me its 1.5% per month 18% annually ... i bill by the 5th and its due by the 15th ...
    any payments not received by the 20th and im calling to find out if the payments are in transit ... no check number -- no service til the accounts current.

    i understand that we are a commodity type business ... however this is a business and not a hobby ... my vendors expect their $$$ on the 1st and they dont care about late/outstanding receivables
     
  7. outrunjason

    outrunjason LawnSite Senior Member
    from dallas
    Posts: 703

    Wow you call if they are 5 days late. :) I just don't have time to do that. If I had a secretary or something I might do that but other wise when I come home at the end of the day I am tired.

    When you do call are they surprised or do they say they are paying it or what?
     
  8. gringo gardener

    gringo gardener LawnSite Member
    Posts: 95

    The service agreements they sign each Dec stipulates that any account is delinquent if payment or arrangements have not been received in our office by the 15th ...

    If I wait 30 days to post an invoice and then they have 30 days to pay -- now its 60 days (8 service visits) before I can call them late (if theres no payment) and then its probably another 2 wks (10 service visits) b4 payments r received ...

    Im not a bank allowing them credit .. Im a service provider that expects to get paid for the services I provide in a timely fashion ... just as they expect services rendered on a regular basis ...

    I merely call them as a "courtesy" that payments have not been received and ask them if theres a problem with services ... usually its simply the fact our lawn invoices get pushed to the back of their list ... rarely do ppl get upset (unless they're avoiding us) but understand from our intial consultation that services rendered results in monies owed and I call when its late
     
  9. outrunjason

    outrunjason LawnSite Senior Member
    from dallas
    Posts: 703

    I believe the way you do. If we arrive in a timely fashion then we expect payment in a timely fashion. This year I have started accepting credit cards just to make it that much easier for my customer to pay. No one has an excuse not to pay now.
     
  10. grasshopperslawn

    grasshopperslawn LawnSite Senior Member
    Posts: 293

    do alot of your customers pay with credit cards I have been thinking about accepting credit cards my self but I just don't want to pay the monthly fee if I do not have enough customers use this option
     

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