net 15 / net 30 and does anyone charge late fees

Discussion in 'Business Operations' started by kandalawncaremgr, Jan 24, 2013.

  1. kandalawncaremgr

    kandalawncaremgr LawnSite Member
    Posts: 223

    I'm curious on monthly billing contracts do you guys do net 15/30 also does anyone charge any late fees if payment isn't made. Last year I had three people that would wait 2 months to pay me. Its frustrating waiting around for money. So I was wondering if I applied a late fee maybe people would pay a little more attention. Any suggestions besides drop the people.
  2. kandalawncaremgr

    kandalawncaremgr LawnSite Member
    Posts: 223

    I try to get everyone due on completion but as we all know work and different schedules and such.
  3. Landrus2

    Landrus2 LawnSite Platinum Member
    Posts: 4,814

    Forget the late fee be happy you get it late:waving:
  4. djlunchbox

    djlunchbox LawnSite Member
    Posts: 122

    it is in our contracts, however we have tried to not charge the fee and give people just a little extra time to pay. 85% of people ended up paying, but i have a few deadbeats. We started with a simple "hey, um, you owe us money" style letter, than 3 formal collection letters with late fees added each month, now I will be suing these people.

    I would do net 15, with a 10% or more of the overdue balance added each month until paid in full. Service suspended after 30 days late. That will be the first change I make in the 2013 season contracts.

    DO NOT let people run up a balance. I learned the hard way.
  5. cpllawncare

    cpllawncare LawnSite Silver Member
    Posts: 2,659

    At 30 days after invoice they automatically go to collections after that it's out of my hands until the money is paid. All collection fees are tacked onto the balance same for legal fees if it goes that far.
  6. CLS_Birmingham

    CLS_Birmingham LawnSite Member
    Posts: 128

    Who do you use for collections?? I have several clients that are headed that direction.

    As for the net 15/30, we use net 15 thought clients do have late fees built into their contracts. I generally don't ever charge late fees, but if I feel its warranted then I will. We also use the 3 formal letter method for collections. Most people will atleast call you after 1 or 2 letters and make arrangements. Its almost always easier to work with a client than to lose a client.
  7. cpllawncare

    cpllawncare LawnSite Silver Member
    Posts: 2,659

    I've found that it's easier for me to not be the bad guy, I pissed off a late paying customer and ended up losing them, I just don't have patience for people that don't pay their bills, so I fired myself from the collections dept LOL! PM me and I will let you know who I use, it's a very good professional system that works, I've already settled two out of three no pays I had last year using them, the third one will probably end up in court.
  8. skorum03

    skorum03 LawnSite Senior Member
    Posts: 354

    Just out of curiosity, whats the most you've had someone not pay you?

    YardBros Outdoors
  9. kandalawncaremgr

    kandalawncaremgr LawnSite Member
    Posts: 223

    Last year I had lost 500. Dosent seem like alot but when its your first year it hits ya. Now I have double my customers this year. It wasn't my regular it was the I need you a few times while my mower is broke. Then after three cuts I see a new company there so I stop and ask them and they said they called cause there mowers broke. Same song and dance.
  10. cpllawncare

    cpllawncare LawnSite Silver Member
    Posts: 2,659

    $1700 cleanout

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