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About late payments and late fees

flascaper

LawnSite Member
Location
Orlando florida
I have a descent amount of customers who consistantly pay me late almost 2-3 weeks late. I did not start with a late fee but being in need of the funds more and more "on time" to pay my bills I find it harder to avoid. Any thoughts??
 

Kennedy Landscaping

LawnSite Fanatic
Location
El Dorado Kansas
Have a chat with your customers and come up with a contract for them to sign. Tell them payment is due by such and such day at xx:xx. After that there will be an $x charged each day.
 

LB1234

LawnSite Gold Member
Location
Central Jersey
have them sign a service agreement which spells out when/how invoices will be sent AND outline late fees and finance fees. ENFORCE IT

Another thing you can do if you are having cash flow problems is provide a discount for those customers that pay early (or before a certain date).
 

Landscraper1

LawnSite Senior Member
Location
Southeastern Ma.
have them sign a service agreement which spells out when/how invoices will be sent AND outline late fees and finance fees. ENFORCE IT

Another thing you can do if you are having cash flow problems is provide a discount for those customers that pay early (or before a certain date).
Ditto. :cool2:
 

lukemelo216

LawnSite Bronze Member
Location
...
draft up a contract, make them sign it and enforce it. But be careful look into florida laws regarding late fees. In WI the maximum you can charge is 1.5% monthly or 18% annually on a late fee by law.
 

TeamLawnCare

LawnSite Member
One of the best advices that I have ever received was from a finance guy who owns an extremely successful loan company. He said "Money is the number one way that people take advantage of each other" He then said "You work hard for your money, make sure you never get taken advantage of for that work, protect it"

During my first few years of business it seemed that each year when the season was over I would spend the next few months collecting late payments. This is not a fun experience, and gets ugly really fast even when done in a professional manner. As has been mentioned, make sure your customers know you mean business and won't stand for late payments. They need to know that you care and expect to be paid on time. Let them know the parameters of the contract and then be overly aggressive for the first while making sure those deadlines are met. Two things to consider, I don't know where you are at with your company but look into charging by credit cards. It is worth the 2-3% you will lose knowing you will have to collect a significant amount less. Also I take very good care of my valued customers, those who don't pay me. I simply collect and tell them I know longer will do business with them. Make sure you get paid what you are worth, which is every penny.

Hopefully this doesn't come across as a rant, maybe I am a little emotional because one of my good friends has a customer who had an outstanding bill of close to $5,000. He had contacted him numerous times throughout the winter and didn't receive payment. This customer has the funds to pay this bill, my friend offered a payment plan. Again the payment never showed. In desperation he negotiated with the guy and lowered the bill. The check was in his mailbox two days later. He lost $2,000 for work that he had done because this man took advantage of him and he was unable to collect. Two things never let a bill get this out of hand, and two never let this happen!
 

SoDak

LawnSite Member
Location
Sioux Falls, SD
I now check all of my new potential customers to see if they have ever had any small claims against them. It's public information and it's easy to get online. I did this after I won a settlement and the person had 4 other claims against him. And, he is an orthopaedic surgeon. The sheriff's department eventually seized assets out of his bank account and I got the money, but it was a pain in the *ss.
 

grassman177

LawnSite Fanatic
i was going to mention, unfortunately there are limits of late fee charges that i believe vary my state. if there was not, i am sure we would mkae it much higher than we do
 

clydebusa

Inactive
Location
Tulsa Oklahoma
I do everything on quick books. Send the customer an invoice via e-mail and expect them to pay by the next mowing. For example I send the invoices out every month or four mowings and as soon as the fourth one is done, send the e-mail and will collect the money the next time I mowing the acct.

If you don't have quick books or peach tree you could do one via email or just old fashion slow mail.
Good luck!
 
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