Heres why we should charge late fees

Discussion in 'Lawn Mowing' started by Ocutter, Aug 29, 2000.

  1. Ocutter

    Ocutter LawnSite Senior Member
    Messages: 314

    Hey all,
    I was listening to talk radio today and they were talking about Blockbuster videos late charge. If you were to rent a hot off the presses video and it came back a day late, they would charge you the equivalent to a 5 day rental fee. By doing this Blockbuster rakes in an additional (are you ready for this) SEVENTEEN PERCENT extra per year.
    In smaller terms If I made 35K this year, nearly 6k would be from late fees. I dont know about you guys and gals but Im adding this next year.
    That leaves one question. Some threads have read that you can only charge upto a certain percentage to be within the law. Is this true? If so tell "big blue" otherwise Im adding $5 to all late bills.
  2. Esby

    Esby LawnSite Senior Member
    Messages: 662

    I am all for late fees. I will be placing a $10 late fee on all bills that are not paid with-in 15 days. This will go into effect next pring.
  3. bob

    bob LawnSite Platinum Member
    from DE
    Messages: 4,262

    I give my customers 30 days to pay. I only had one constantly late paying customer last year. And this year I raised his price,$3 per cut, to make up for his tardyness.
  4. Kent Lawns

    Kent Lawns LawnSite Senior Member
    from Midwest
    Messages: 870

    The demographics I serve and those served by Blockbuster are totally different consumer groups.

    If you can increase your income by 17% by charging late fees, I'LL MATCH IT! :)
  5. fdew

    fdew LawnSite Member
    Messages: 147

    I have found that in my business it is easer to charge 10% more and give a 10% discount for payment in 10 days. When I have tried late fees they just don't pay it. (I am not in lawn care. I am a self employed mechanical designer.)
  6. gusbuster

    gusbuster LawnSite Bronze Member
    Messages: 1,970

    As much as I would like to charge late fee's, I would loose about 75% of my business. Why? As long as other maintenance gardners don't do it, I realy can't do it. Second, It is illegal to charge a straight across late fee call it a late fee in California, however, I can charge interest and I do. (22% per annum, min of $.50) This reduces just about all my late payers.
  7. LoneStarLawn

    LoneStarLawn LawnSite Bronze Member
    Messages: 1,415

    Late fees don't work here. Unless you have it in your contract with the customer a late fee will probably not be paid (most of our accounts are non-contracted). Blockbuster can do it because of the agreement that you sign for membership..thats why they have your credit card number. Customers who don't pay on time are really not good accounts and should be continued for the year, but the next year increase price or drop the account all together.
  8. landscaper3

    landscaper3 LawnSite Bronze Member
    Messages: 1,354

    You will always get the no-payers. Every one has there own method of late charges, ours are in our contracts 30 days late 5% intrest and stop services until paid. It has worked for us because they signed the contract!!! As a matter of fact we have 2 companys known for not paying landscapers ( found out after 3weeks in the contract ) you have a contract they have no feet too stand on if you forfilled your part of the contract. But remember everone has a different way of billing.

    Ideal Landscaping Co.
  9. thelawnguy

    thelawnguy LawnSite Silver Member
    Messages: 2,411

    Personally, I would rather have all my money w/in 30 days than worry about late fees.

    All but maybe six of my customers pay within seven days. The remaining six, they get a phone call after 21 and the money is here before the next bill goes out.
  10. Bink

    Bink LawnSite Member
    Messages: 5

    Bill, you have the best home page on the web....Bink

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