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Need feedback on my payment terms & conditions/disclaimer

Discussion in 'Business Fundamentals' started by pancakes55, Dec 11, 2014.

  1. pancakes55

    pancakes55 Junior Member
    from US
    Messages: 19

    Hello
    Can someone please give me some constructive criticism.

    This is located at the very bottom of each invoice above my footer.

    "All balances are due in full within 15 calendar days of the date on any invoice for services provided by the contractor. Payments are accepted in the form of cash, check, debit or credit. Please make checks payable to "ABC Mowing & Plowing LLC." Mailed checks must be received by the due date on each invoice. A service charge of $30 will be added to any returned check. Debit or credit payments are accepted by phone, in person or through online invoicing. Please contact our office or email us if you wish to pay online. Late Payments: should the client fail to pay the contractor in the full amount specified in any invoice within 15 calendar days, a late fee shall be added to the amount due. Thank you for your business."

    Main parts I am concerned with are in green (gf says they should be omitted or re-worded.

    This year we are trying payments in 15 days instead of 30. Last year many late payments.

    I use paypal for CC and debit. So I have to double invoice anyone paying like that. I know the clients which pay with cc or debit each months and they get a generic online invoice automatically from paypal. This is just geared to the typicall cash or check customer that just needs to use a card that month

    The late fee amount is omitted (its in contract) because its 10.5 annual in my state or .875% monthly and that just a joke. People would not pay just because that not even a slap on the wrist.

    The "thank you for your business is in the terms and conditions and in the main part of the bill. Figured if anyone ever actually read the terms and conditions its a nice touch...but its redundant. Keep it or omit repeating?

    All my clients are on a contract except for the occasional call in.

    Let me know if you have any questions

    Screenshot of what the invoice looks like:

    lawn site pic.jpg
     
  2. maxwellp

    maxwellp PlowSite.com Addict
    Messages: 1,112

    I put on mine, All Invoices Due Upon Receipt. I explained this to all my clients and this has almost put a stop to late payments. If they do not pay I do not plow next month. I only have one that is a chronically late, but they have been with me for along time and always pay in the end. So it is like a June Snow Bonus. Ha Ha
     
  3. Mr.Markus

    Mr.Markus PlowSite Fanatic
    Messages: 5,181

    Net 30....but I send them 60 days in advance...everyone is late before they get an invoice...speeds things up.


    I think you put too much thought into it. Due on receipt is self explanatory. Anyone who's gonna be late won't read that anyway. Heck I only made it partway through...
     
    Last edited: Dec 11, 2014
  4. JimMarshall

    JimMarshall Senior Member
    from NW PA
    Messages: 785

    I think you should get rid of 90% of it.

    "All balances are due in full within 15 calendar days of the date on any invoice for services provided by the contractor. Payments not received by this due date are subject to a late fee. Thank you for your business."
     
  5. Bartlett_2

    Bartlett_2 Senior Member
    Messages: 226

    Due upon receipt... It's on all mine, and I never have issues...
     
  6. onemanband

    onemanband Member
    Messages: 33

    Exactly, what he said. Due upon receipt. Most people are use to it. Same as mowing. 15 days past due $20 late fee will be charged. 30 days late I will have an associate stopping by:gunsfiring:
     
  7. JimMarshall

    JimMarshall Senior Member
    from NW PA
    Messages: 785

    Since you haven't had a lot of response I'll break it down further. Of course these are just my opinions.

    "All balances are due in full within 15 calendar days of the date on any invoice for services provided by the contractor.

    reasonable and straightforward.

    Payments are accepted in the form of cash, check, debit or credit.

    So you accept every form of payment imaginable? Not sure why you need to spell this out.

    Please make checks payable to "ABC Mowing & Plowing LLC."

    Who else are they going to make it out to? Scrooge McDuck???

    Mailed checks must be received by the due date on each invoice.

    So if someone mails you a check that postmarked 3 days after the date of the invoice and you don't get it for a month you're going to give them a finance charge?good luck with that.

    A service charge of $30 will be added to any returned check.

    I can see this.

    Debit or credit payments are accepted by phone, in person or through online invoicing. Please contact our office or email us if you wish to pay online.

    I think a better way to go with this would be to enclose a little 1/3 page flyer with the first invoice for a new customer or with the first invoice of every season advertising paperless billing/payment.

    Late Payments: should the client fail to pay the contractor in the full amount specified in any invoice within 15 calendar days, a late fee shall be added to the amount due.

    I think you would be further ahead to tack the following onto the end of the first statement in your invoice. " after this time a late fee will be applied. "

    Thank you for your business."

    Mine say the same thing.
     
  8. MSsnowplowing

    MSsnowplowing Senior Member
    Messages: 710

    This is in my contracts:

    5. Compensation / Payment Exhibit
    Based on the set fee, described in the attached Exhibit B, the Client agrees to pay the Contractor for this service as follows:
    Payment is expected within 7 days after the invoice has been sent.
    The invoice will be emailed or faxed to the client.
    Any invoice or scheduled payments not paid within 7 days of the invoice can be subject to a 5% late charge.
    A service charge of $30.00 will be charged for any returned check.
    The contractor reserve the right to suspend service when payments become more than 7 days past due.

    If I have not received payment by the 7th day, I send notice to the client that service has been suspended until payment has been received.

    Here is yours as I would write it:

    All balances are due in full within 15 calendar days of the date on any invoice for services provided by the contractor.
    Should the client fail to pay the contractor in the full amount specified in any invoice within 15 calendar days, a late fee of 5% shall be added to the amount due.
    The contractor reserve the right to suspend service when payments become more than 15 days past due.
    We do accept all types of payments.
    A service charge of $30 will be added to any returned check.
    Debit or credit payments are accepted by phone, in person or through online invoicing.
    Please contact our office or email us if you wish to pay online.
    Thank you for your business.
     
  9. Superior L & L

    Superior L & L PlowSite Veteran
    from MI
    Messages: 3,039

    Lol, this is about the funniest payment terms I've ever read! 7 days!!!!! If I received this in a contract from you I would throw it in the garbage and call a really contractor. With how the mail crosses that gives your customer 2 days to pay your invoice or you cancel service. I'm sure you don't have any commercial accounts
     
  10. MSsnowplowing

    MSsnowplowing Senior Member
    Messages: 710


    Psst grandpa they have this thing called internet that you can use to send your bills to your clients and they receive it the same day within minutes of you sending it.

    And as a matter of fact I picked up 5 new commercial accounts this year with those terms in the contract and no one had any problems with it.

    So stick that in your pipe and smoke it.

    Merry Christmas :D
     
  11. StephInBC

    StephInBC Junior Member
    Messages: 3

    It's easy to understand why you'd want payment to be quick, we all do. On another note, it's important to remember that some property managers and larger commercial companies can take anywhere btwn 30-90 days to pay. If you're not willing to have some flexibility with your terms you may find yourself losing out on some great contracts.

    My biggest client (about 30% of annual revenue) pays within 90 days. Not always a fun wait but that's 30% REVENUE! They are the reason I can spend my summers on the beach. I'd be a fool to turn down that kind of money. The most important thing to remember is to communicate with your client before you agree to take them on. If they cannot meet your requirements it's better to know sooner rather than later.
     
  12. SnoFarmer

    SnoFarmer PlowSite Fanatic
    from N,E. MN
    Messages: 8,614

    A late fee is normally assessed as a monthly finance charge. Figuring out what to charge is a two-step process. First, divide the annual interest rate you want to charge as a late fee by 12 to determine your monthly interest rate. Next, multiply this monthly rate by the amount due to determine the amount of the monthly late fee. For example, if the annual interest rate is 12%, the monthly interest rate is 1%. If a client owed you $10,000, you'd multiply this amount by 1% to figure out how much the client owes you every month as a late charge. One percent of $10,000 is $100, so the client would owe you an extra $100 for every month his payment was late.
    Your state might restrict how much you can charge as a late fee. As long as you charge no more than 10% per year, however, you probably won't run afoul of your state's rules.


    You can't just make up the interest rate or the %your going to charge.
     
    Last edited: Feb 5, 2015
  13. JimMarshall

    JimMarshall Senior Member
    from NW PA
    Messages: 785

    You can charge a minimum charge I believe though.