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Whats an appropriate late fee?

Discussion in 'Commercial Snow Removal' started by northernsweeper, May 10, 2011.

  1. northernsweeper

    northernsweeper Senior Member
    Messages: 397

    I have an account that owes me several thousand dollars from January. They have a 60 day payment policy, so it became overdue on April 1st. They told me to send an invoice for late fees because I still haven't gotten paid. As of today,they are 40 days overdue. Is there a standard amount for late fees?
     
  2. buckwheat_la

    buckwheat_la 2000 Club Member
    Messages: 2,254

    work it out as a percentage, per day, there are usually rules about how much you can charge for late penalties, and they are state/province regulated usually.
     
  3. blowerman

    blowerman PlowSite.com Addict
    Messages: 1,261

    Are they a NSP? Who tells you they pay in 60 days?
    At the latest I have net 30 terms, not that people don't pay late.
     
  4. northernsweeper

    northernsweeper Senior Member
    Messages: 397

    Thanks for the response you guys. NO..they are not an NSP, learned my lesson there. They are a national chain and are excellent customers. Only time in 3 years they have been late. Was told emailed invoices were mis-routed then re-routed. I wouldn't much care normally, but it came at a bad time for me financially, and I would like to give them some incentive to not do it again. I offered to pay overnite fees to get it, but they said it has to go through their process. Was told they are very happy with my work and that I should invoice them for late fees. They said fair is fair and it wouldn't effect our relationship. Do you charge say 1.5% on the overdue amount per month,day,week? I told them, I didn't want late fees, just wanted my check......whatever??
     
  5. wizardsr

    wizardsr PlowSite.com Addict
    Messages: 1,557

    1.5% per month is statutory in MN, last I checked, unless you have another amount specified in your contract. 1.5% (18% apr) is pretty dang low IMO, my late fees are substantially higher in my contracts. Customers need to know we're not a bank. My dad always told me, never be afraid to ask for your money, it's your money. payup
     
  6. Mick76

    Mick76 2000 Club Member
    from Maine
    Messages: 2,157

    Tell them you'll waive the late fees (but want your check) if they sign a multi year deal with a late fee clause added of course
     
  7. northernsweeper

    northernsweeper Senior Member
    Messages: 397

    I have tried the multi year with them but they are strictly a year by year. Would have definitely traded a multi year for the late fee:drinkup:
     
  8. Mr.Markus

    Mr.Markus PlowSite Fanatic
    Messages: 5,169

    Statements should be sent out every 30 days min. (With a late fee added) Mines 2.4%/mth which I consider cheap. If they're late more than 3 times a year I don't consider renewal unless they've given me a heads up.
     
  9. justme-

    justme- 2000 Club Member
    Messages: 2,138

    1.5% legal max here to, but I charge $5 late processing for having to do that which is also legal here, 30 days net here too.
     
  10. Flipper

    Flipper PlowSite.com Addict
    from CT
    Messages: 1,180

    I charge $25 after 30 days. I usually don't apply this until it hits 45 days. After that it 1.5%. My invoices are due in 15 days though as said I don't consider them late until 30 and charge after 45. In this day of online banking etc there is no reason a person or company cannot issue checks faster. Their antiquated business model is no excuse. Don't let them push you around.