Late Fees, do they work?

Discussion in 'General Industry Discussions' started by bignamelawncare, Aug 4, 2010.

  1. bignamelawncare

    bignamelawncare LawnSite Member
    Messages: 43

    Well cash flow is a real issue for us. We mow for the month, then send the bill on the first of the new month. I don't bill for stuff I haven't done yet. I don't want to complicate things. This year I added a line on my invoices about a late fee. Still had some people not pay on time. So I issued late fees of $20.

    Had one guy already call, he "refuses to pay a late fee". I said "fine, no problem just send me the money you owe me and we're good."
    He said the check was on the way.

    Had one lady cancel her service.
  2. DitchDr

    DitchDr LawnSite Senior Member
    Messages: 256

    Payment is due by the last day of the month. If it is not in my bank by the 5th, your cut off and have a 20 dollar late fee untill we get paid. Call me ahead of time and i will work it out, but flat out not paying or not talking forget it.

  3. kodak mowing

    kodak mowing LawnSite Member
    Messages: 140

    i tried it that way before,it was a big hassel so i only mow monthly for a few select customers who have been with be for a while,theres to many people out there who knowing well never pay,but i do have alot of people i mow then call or text,and they mail a check,no check no mow.
  4. MJS

    MJS LawnSite Bronze Member
    Messages: 1,316

    5% late fee after one month, + 10% more after two. Services cease after 60 days late.

    Works like a charm.
  5. ed2hess

    ed2hess LawnSite Fanatic
    Messages: 14,372

    Phoeeee....this is just another way to lose customers. They could tie you up in your shorts trying to stay on top of who owes what and when did they pay and how much. A $100 bill that is late by one month only cost YOU about 50 cents. You tell it worth that to ride herd on people.
  6. stan the man

    stan the man LawnSite Senior Member
    from Maine
    Messages: 702

    mowing i have only account that i had the problem getting my money he gone plowing season is the problem getting my money from some accounts i have a lot account that make 3 payments for the hold year of service
  7. dgw

    dgw LawnSite Bronze Member
    from OH
    Messages: 1,008

    put in your contract that you use collections

    people like their credit
  8. Roger

    Roger LawnSite Fanatic
    Messages: 5,940

    There are many threads like this that discuss "adding a late fee." But, rarely does anybody ever say they collect a late fee. I think most are like the person cited above, "pay what they owe, and call it good." As somebody also stated above, keeping track would be a nightmare if you have a few late payers.

    I am presuming this OP is concerned with typical residential mowing work. If not, then discount what follows. If the OP is speaking about large dollar volume work, such as design and installs, high material costs, then the situation is different.

    As I stated in anther recent thread on this topic, remember your services are not the only game in town. If somebody gets irritated with you about nickel-dime fees, they can easily move to the next person for their mowing needs. Reading LS threads, it sounds like most of us have many other LCOs standing in line, waiting to take our customers for any reason. The customers know this. If an LCO wants to be difficult, then why wouldn't the customer just move on to another contractor? Don't get me wrong. I want my money just as much as another contractor. And, I'm counting on the integrity and honesty of the customer to pay their bills. But, I also know that if a contractor makes like just a little difficult, and the customer knows there are many other choices, their decision is a no-brainer. None of us bring anything unique to the marketplace. None of us are in a leveraged position. Sorry, don't use the late fee system of other vendors (e.g. credit cards) as a basis. We are not the same at all.
  9. meicher806

    meicher806 LawnSite Senior Member
    Messages: 385

    Yup we charge a late fee and we stick too it. If customers are not paying on time there could be the chance I cant pay something on time thus resulting in a late fee for me on my bills. We pay our bills on time so I dont have any late fees but why should i be out money because they didnt pay when they were supposed to, and furthermore werent nice enought to call and let me know what is going on. Money gets tight some times I understand that. I have it in my contract that i have the right to charge a late fee, I also have the right to waive said fee if you call me and let me know what is going on.

    On a side note. I have a customer that is very very slow to pay. I did work for them 2 years ago now, their bill never goes down because they only send me $25 every few months. your right i am going to charge interest.
  10. Glenn Lawn Care

    Glenn Lawn Care LawnSite Silver Member
    Messages: 2,645

    They work for me without problems! I only issue them to new clients. My clients that are rich I do not!

    I use to have a $20 late fee after a certain date but I changed it 1.5% of their monthly bill and it works great!

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