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  • Late fees

    Who charges late fees for invoices not paid after 30 days? Do you charge a certain percent? I have just recently had some people drag out paying. Just need some insight.

  • #2
    Re: Late fees

    My invoices always said 1.5% after 30-days but I never charged it. The truth is I saw my aged receivables as money in the bank. The customer always paid and I considered it one of my reserves. Even today I get a little nervous when my receivables get too low.

    Mark
    "Somewhere a Village is Missing Twelve Idiots!" - Casey Anthony

    I never lost a cent on the jobs I didn't get!

    Comment


    • #3
      Re: Late fees

      1st a call requesting payment. depending upon reply i will add a fee of $35. this gets faxed with a note that every Friday at noon another $25 fee will be added. after another 30 days it's small claims, if necessary.

      only had to do small claims once

      steve
      In the never ending struggle to keep the water flowing.... The Poo Poo Cowboy rides again!!!

      Comment


      • #4
        Re: Late fees

        late payments are a thing of the past for my business, I learnt the hard way allowing clients 30 days and living on my overdraft, I demand payment on completion and get it I used to think the same way as Toutahnow being owed money was a good thing but really its not, you suffer by not having the cash flow and that is the most important part of a sucessful business.

        Tony

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        • #5
          Re: Late fees

          usually only commercial customers get the 30 days. i currently have 2 restaurants that are WAY over 30 days. small claims here we come

          steve
          In the never ending struggle to keep the water flowing.... The Poo Poo Cowboy rides again!!!

          Comment


          • #6
            Re: Late fees

            Originally posted by ToUtahNow View Post
            My invoices always said 1.5% after 30-days but I never charged it. The truth is I saw my aged receivables as money in the bank. The customer always paid and I considered it one of my reserves. Even today I get a little nervous when my receivables get too low.

            Mark
            If you see it as money in the bank, why wouldn't you prefer money in the bank?

            Comment


            • #7
              Re: Late fees

              Originally posted by cpw View Post
              If you see it as money in the bank, why wouldn't you prefer money in the bank?
              My current receivables are in the high 5-figures. When I get into the low 5-figures I worry work is slowing down. After 30-years in business it is more of an emotional feeling than a fact based reality.

              Mark
              "Somewhere a Village is Missing Twelve Idiots!" - Casey Anthony

              I never lost a cent on the jobs I didn't get!

              Comment


              • #8
                Re: Late fees

                Originally posted by ToUtahNow View Post
                My current receivables are in the high 5-figures. When I get into the low 5-figures I worry work is slowing down. After 30-years in business it is more of an emotional feeling than a fact based reality.
                So it sounds like you are using it as a simple proxy for revenue.

                Comment


                • #9
                  Re: Late fees

                  i don't take credit cards. it's not that my customers don't have the money, it's they want the rewards.

                  typically i try to get paid when they are home. but sometimes they say they will pay from their office or electronically.

                  commercial accounts can't pay on the spot.

                  at any given time i'm sitting on 30 +/- invoices. which all get paid either in days or a month or 2. only once i didn't get paid and i knew that when i went to give them the bill.

                  fortunately most of my billing is labor and not materials. and if it's a special part, i have 30 days with my supply house and another 30 days if i pay by credit card. so realistically, i'm not sitting on anything more than labor.

                  rick.
                  phoebe it is

                  Comment


                  • #10
                    Re: Late fees

                    Originally posted by cpw View Post
                    So it sounds like you are using it as a simple proxy for revenue.
                    I would say that is a fair assessment. I have always had fairly reliable clients. With the exception of an insurance company which went under my uncollected debts average well under $500 per year across 30-years.

                    Mark
                    "Somewhere a Village is Missing Twelve Idiots!" - Casey Anthony

                    I never lost a cent on the jobs I didn't get!

                    Comment


                    • #11
                      Re: Late fees

                      Thanks for your comments. I have alot of long time repeat customers that I have worked for the past 15yrs. I don't like charging them late fees, but sometimes you have to get their attention or they will take advantage of you. I usually try to collect from new customers before I leave. Most of the time when I'm there they are not so I bill them. They leave me a way in. This is a small town were word of mouth travels fast. They know I am trustworthy.

                      Comment


                      • #12
                        Re: Late fees

                        I remember when there were issues with our economy many years ago and some of our customers were really late in paying. What I did was not popular at my house but I still got dinner every night. I told these late customers that had not payed their bills because of money problems not to worry. I told them to get back on their feet and to not think about my bill even if they got a late notice from our office. I also told them that if they had a plumbing problem big dollar or not , I would cover it for them until they had the money. All of these people overcame their financial issues, paid me and never asked what a job would cost from that day on. We did all our invoicing by mail. I know that is ill advised in our industry but I won't go into that at this time. One thing we discovered was that when we gave people 30 days to pay, a lot of them turned that into 60 days. When we changed our billing to 10 days we saw an incredible difference in cash flow.

                        Comment


                        • #13
                          Re: Late fees

                          On word (or acronym)...C.O.D. I collect $$$ immediately on 99% of jobs.
                          Water Heater Reviews & Water Heater Information

                          Comment


                          • #14
                            Re: Late fees

                            Originally posted by rookie plumber View Post
                            One thing we discovered was that when we gave people 30 days to pay, a lot of them turned that into 60 days. When we changed our billing to 10 days we saw an incredible difference in cash flow.
                            If you've got 10 days, 2 are taken up by the mail each way; so you might as well pay it when you get the bill. With 30 days, you might try to manage your cash flow; put it in a pile and forget about it until you get the second notice.

                            Comment


                            • #15
                              Service Charge

                              We don't call them late fees. We call it a 'Service Charge'. Our contract calls for a 1-1/2% service charge after the customer is 30 days late. We wait until 60 days. If you do nothing, the customer has no motivation. Most customer call, grumbling about the service charge, and we tell them we will remove all service charges if they catch up on payments. Almost every time, to take the bitterness out of the customer, we remove every service charge when the final payments are made.

                              How long do you wait before you start aggressively collecting.

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