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Late Fees

Discussion in 'Business Fundamentals' started by snow_man_48045, Jan 23, 2003.

  1. snow_man_48045

    snow_man_48045 Senior Member
    Messages: 324

    What % do most of you charge for late balances due, for the forgetful customers that don't like to pay there bill on time? I was thinking of 10%. Is this too high or low? Your inputs would be great! Thanks for all the help, and keep thoughs good threads coming!!payup :waving:
     
  2. Arc Burn

    Arc Burn PlowSite.com Addict
    Messages: 1,139

    I believe in some states there is a law with a max.,only a couple % i think,don't quote me on that but a local contractor in NY told me that.
     
  3. nben

    nben Senior Member
    Messages: 101

    Limited to something like 18% annually here in Maine. But if you call it a service charge and not a late fee you aren't as restricted.
     
  4. fordman

    fordman Senior Member
    Messages: 327

    I would charge 10%-15% for a late fee.
     
  5. plowed

    plowed Senior Member
    Messages: 344

    States set what they call "Usery" (sp) rates, which is the highest rate of interest that can be charged. Some states it's as high as 30+%. Here in CT it's 18%, and most people have it worded on their invoices such as , 1.5% per month (- which multiplied by 12 months is 18%), or stated as 18% per annum.
    You can contact your state Banking Commissioner for the usery rate in your state.

    -John
     
  6. Earthscapes

    Earthscapes Senior Member
    from WNY
    Messages: 577

    My contract states that they must have their 2nd payment in by Jan. 15th. or plowing will cease. I send out reminders around dec. 15th. So now they know twice that they owe on Jan. 15th.

    If i do not get paid by the 15th i don't plow their drive. Then they call and ask why they didn't get plowed and i tell them. They are always saying i'm sorry and we have the check right here,,please come pick it up.

    I tried adding late fees to my lawn cust. and most of them only sent in the orignial amount before the late fee.So i like this method better.
     
  7. drobson

    drobson Senior Member
    Messages: 112

    So far I have not had the need to think about late fees, but I notice a trend with payments being a little later every time with some customers. It is not to a point that I need to charge a fee, but I think it will get that way at some point in the future. This post has me thinking about setting up something on each invoice with a late fee schedule so that it may deter some customers from becoming offenders. I would rather have them pay on time and not have to charge a late fee. No matter how much I charge them, it will still be better for me to just have the payment on time. I also like the idea of suspending service for past due accounts. I will most likely add that into my late fee schedule.
     
  8. snow_man_48045

    Are they residential customers?

    I only have residential customers and in my contract it states "terms 30 days from date of service, after 30 days a $10.00 late fee will be added per service".

    I know each state has limits on percentages that can be charged for interest, but LATE FEES are different. A house mortage of say 8% is included in your house payment, but if your payment is late, a Late Fee is added.

    I am going to make a re-assuring call to my CPA to make sure about Late Fee limits.

    Hope it helps. Bob V