Late Fees

MHasterok

MHasterok

New member
What are some of you putting in your contracts for late fees, if any? Most of my accounts are either net 30, or net 45. One of the net 30 accounts is making a habit of going past the 30 days.

What is a common $ amount to charge when the commitment date is passed, and do you charge by the day, week, etc.
 
MHasterok said:
What are some of you putting in your contracts for late fees, if any? Most of my accounts are either net 30, or net 45. One of the net 30 accounts is making a habit of going past the 30 days.

What is a common $ amount to charge when the commitment date is passed, and do you charge by the day, week, etc.
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1.5% past 30, but I would never even think about charging a late fee till I at least talked to them to get a grip on why they are not paying.

Most of the time just sit back and don't make waves, sometimes if you pressure them for payment, it makes them more aware of how much they are paying you, and they may rethink using you at all, the decision maker just may drop you in favor of saving money.

Worse comes to worse, document EVERYTHING keep meticulous notes and in the end if they refuse then you have your ducks in a row to sue, get a lien on the property and collect 30% per annum.
 
swrest said:
1.5% past 30, but I would never even think about charging a late fee till I at least talked to them to get a grip on why they are not paying.

Most of the time just sit back and don't make waves, sometimes if you pressure them for payment, it makes them more aware of how much they are paying you, and they may rethink using you at all, the decision maker just may drop you in favor of saving money.

Worse comes to worse, document EVERYTHING keep meticulous notes and in the end if they refuse then you have your duct in a row to sue, get a lien on the property and collect 30% per annum.
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Good advice Joe, thanks!
 
It's probably bad business, but I quit charging late fees when the economy took a poop. I think the worst of it is over now. I don't have anybody over 120 days right now. The last time I had to write anybody off was over 5 months ago.

Here the current breakdown:

90-120 - 1%
60-90 - 3%
30-60 - 11%

That's actually outstanding. It hasn't been this good since 2007. But, the other end of the stick is this is a streamlined customer base with a LOT of bad ones dropped and written off. I might be time to bring back late fees.
 
I don't charge late fee's either, I do offer discounts and have about 1% of my customers take advantage of that and its a net 15 account at that. 2%7net15
 
If you cant wait for the money,keep in mind there is always someone that can. they have enough to worry about. If its a mom and pop I would go in person and ask them If everything is ok. Then let them know about the late payment and if they are in a bind that you can wait alil longer. Or mabey work out a barter program. I stopped charging late fees when i almost lost a big account. they were 60 days over the net 30 and i was running low on funds so i started to push some buttons and they didnt like it.
 
I will say that on one time service I really push them and start calling at 16 days out especially on large sums of money
 
If you use quick books as the account apporaches 30 days re-email the invoice as a "reminder" that it is approachig 30 days past. On corp accounts they go 30-45 sometimes 50 days depending on when the bill hits in thier billing cycle. On sole source accounts ( MOM AND POPS) you have to keep it infront of them.
If they go 60 past they get a phone call and just ask if they forgot or are having money problems and see if you feel comofrtable with what they are telling you and set up a payment plan.
I had great sucess with this in the last 2 years epecially in the winter from dec to spring when restaurants are traditionally slower
 
Alexy said:
If you use quick books as the account apporaches 30 days re-email the invoice as a "reminder" that it is approachig 30 days past. On corp accounts they go 30-45 sometimes 50 days depending on when the bill hits in thier billing cycle. On sole source accounts ( MOM AND POPS) you have to keep it infront of them.
If they go 60 past they get a phone call and just ask if they forgot or are having money problems and see if you feel comofrtable with what they are telling you and set up a payment plan.
I had great sucess with this in the last 2 years epecially in the winter from dec to spring when restaurants are traditionally slower
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Yeah, I do use Quickbooks Pro, and send out reminders.
 
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