Late Fees

Discussion in 'Lawn Mowing' started by mo-fleet, Feb 14, 2005.

  1. mo-fleet

    mo-fleet LawnSite Member
    from PA
    Messages: 33

    I have 3 customers that are always late paying. Policy states on invoice that they must pay within 30 of invoice date or get a finance charge. Well, they continue to ignore the foot note at the bottom of the invoice. One customer did'nt pay till the following month. (1 month late) I've never fee'd them, I've always tried to be nice about it and call to see what the hold up was. Get the money eventually, just a PITB.

    To these 3 customers, I'm sending a LON stating that we have been very lenient in the past on late invoices, but..... blah, blah, blah. I'm telling them that they have until the 15th of every month with a 5 day grace period to pay for the previous month's services. The 21st they will be charged a late fee of $5 with interest added at the rate of 1.5% per month for unpaid balances.

    Is this approach too aggressive? I'm saying it in a nice way. But I'm tired of chasing my $$$ down! Thank you!
  2. environment

    environment LawnSite Member
    Messages: 146

    thats not aggressive enough
    I do a $15 late fee after there due date
    if when i right the following months invoice they are still overdue, i bump it to $30

    if after 2 months, they still havent paid, then they get a court notice
    if they dont pay there balance with late fees by the court date
    then they must pay all court fees, my time in court, there late fees, and the remaining balance of there contract

    i have been told i am kinda ruthless, but my clients understand, and i have never been to court yet.

    are industry is tough, if you dont pay your electric bill, your electric is cut off, sucks living without power, if oyu dont pay your landscaper, what can we do, nothing all that great, so we need extra pursuasion.
  3. GrassBustersLawn

    GrassBustersLawn LawnSite Senior Member
    Messages: 981

    I agree with ENVIRONMENT.

    Not high enough fee & not aggressive enough!

    That is YOUR MONEY they have. Even WORSE, that is YOUR PROFIT! (You've done the work, you've paid the expenses (gas, equipment, labor, insurance) what they OWE you now is PURE PROFIT!) Profit they've taken away from other jobs to pay the expenses. SO GO GET IT! Take them to small claims court or whatever you do in your state. Usually by this point, I don't care if I lose them as a client. I don't want a client that CAN'T or WON'T PAY!
  4. Expert Lawns

    Expert Lawns LawnSite Silver Member
    Messages: 2,660

    A few laws come to mind after reading that first post. I think there is a certain percentage you can charge for a late fee. I'm sure someone will post the exact number, but you can't just charge them any amount you wish. If my customers don't pay by the next billing, I simply call them and tell they have two choices: 1) send a check and if I receive it before the next mowing, I will mow 2) If I show up to mow and find a check taped to the door, I will collect it and mow. If not, they will be fully charged for that visit plus a late fee (which is usually $1-$5, simply to cover my office expenses like envelopes, stamps, time to drop it in the mail AGAIN). This seems to work and it's not to pushy or aggressive; it just works
  5. jajwrigh

    jajwrigh LawnSite Bronze Member
    Male, from Martinsville, IN
    Messages: 1,405

    Way too soft!! That is an invitation to have people screw you over!! Be more aggressive and make your policies known up front and you will gain a new found peace of mind...
  6. tiedeman

    tiedeman LawnSite Fanatic
    from earth
    Messages: 8,745

    yup, legally you can only charge around 18% annual percentage fee for being INC. and for not being INC. you can only charge around 7% annual. So basically 0.58% each month
  7. lawnguyland

    lawnguyland LawnSite Bronze Member
    Messages: 1,108

    Unless of course you are a credit card co. Then you can charge upwards of 29% to people (who can't pay on time anyway!)
  8. Deemo

    Deemo LawnSite Member
    Messages: 2

    Unfortunately I have several of those clients myself. Some are almost always a month late, but they always pay so im stuck between charging them late fee or just dropping them and taking money out of my pocket. Late pay is still PAY. I do charge a $15 dollar late fee after 30 days but some pay and some dont. In this business you just take the good clients with the bad. Like someone said theres not much we can do unless your big business and dont mind the hassle of taking someone to court. Me...if it goes to long I just give them a good cut then write....PAID IN FULL with my roundup in there front yard. :) j/k...but ive felt like it.
  9. Mycannon

    Mycannon LawnSite Member
    Messages: 98

    lol This Is personally what I think about too

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