Late Fees?

Discussion in 'Business Operations' started by keys861, May 14, 2014.

  1. keys861

    keys861 LawnSite Member
    Messages: 20

    This is my first year and the help that I have learned from this site has been tremendous.
    I usually send out bills for the previous months service on the 25 or so with terms payable by the 7th of the following month. My question is about late fees. Do most of you add a late fee if not paid on time? If so, how much? Do you put those terms on the invoice?
  2. Sponsor
    Messages: 804

    I usually use 10% additional per month it is late. However, I rarely enforce it and use it as a deterrent or a leveraging tool when talking with the late and slow payers. Usually just a put a little line at the bottom of the invoice about paying your invoice on time to avoid late fees.
  3. GreenCanvas

    GreenCanvas LawnSite Member
    from Ohio
    Messages: 18

    We tried late fees a few seasons ago, but stopped. Instead of trying to collect MORE money when they already weren't paying, we decided to switch the people who were consistent problems to CASH ONLY. NO CASH, NO MOW. This resolved our problem immensely!! We also changed the terms of payment on the invoices to Due Upon Receipt. I've been told that unless you offer an agreement, that they sign, you are not required to give them 30 days to pay. In our opinion work was completed and payment is due. Period. They know this bill is coming so they needed to or SHOULD have budgeted for it.
  4. eastsidelandcare

    eastsidelandcare LawnSite Member
    Messages: 15

    My experience with using late fees is sketchy. It hasn't seemed to deter people who regularly pay late and they rarely will pay the late fee. Only recourse seems to be to stop doing business with them and that is not very practical in general. What I have found is that it is a small number of problem customers. Over time I have weeded them out of the mix or converted them to pay up front.

    Eastside Landcare
  5. Sponsor
    Messages: 804

    I like the cash option!! Might be trying that this year.
  6. keys861

    keys861 LawnSite Member
    Messages: 20

    Thanks! I think I will do the Cash Only, No Cash, No Mow for my problem customers if one should ever develop. So far, so good.
  7. CreativeLawncareSolutions

    CreativeLawncareSolutions LawnSite Silver Member
    Messages: 2,017

    Oh, they'll develop. It's inevitable.

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