late fees

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Dennis Alwon

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Staff member
Location
Chapel Hill, NC
Occupation
Retired Electrical Contractor
westelectric said:
Anyone follow a strict policy to charge customers say a 1 1/2 percent late fee for accounts over 30 days.

I never have charged a penalty but I only have a few that have gone over 30 days and a quick phone call usually takes care of it.
 

westelectric

Senior Member
Dennis Alwon said:
I never have charged a penalty but I only have a few that have gone over 30 days and a quick phone call usually takes care of it.
On a monthly basis, usually 10-20 service calls will run over the 30 day limit. Service guys will leave a bill at the call but if its not paid, the next day an invoice will go out from the office. I have it posted on the invoice at the bottom but never really enforced it. I'm thinking maybe I should to help out with gas prices before I start charging a fuel surcharge.
 

ayerforce

Member
Location
Hubertus, Wisconsin
Occupation
Electrical contractor
We show interest on our statements after 30 days. That policy is stated on all of our invoices. Honestly though, net 90 is acceptable as long as we get paid. We'll use different markups and margins for slow pay customers.
 
I have a 1.5% after 30 days policy that is written on the bottom of my invoices. When people get to about 25 I call them and that usually takes care of things w/o having to re-invoice them w/a penalty. I certainly have needed to enforce it when people are unresponsive or chronic late payers. I have this one client now (won't be a client much longer) that has in the past received an invoice w/ a late charge and sent out a check for the original amout and conveniently forgot about the penalty. I have ignored it in the past but we are currently involved in the same game. I stopped by her office personally to hand deliver the invoices showing a late fee. 3 days later I received a check for the original amount (fees excluded). I returned to her office and returned the check and handed over fresh copies of the invoices to let her know that she had not paid in full ( as the memo line of the check reflected). Strangely enough she was on a very important call and could not see me. That was 2 days ago and I'm not really sure what the outcome of this will be but I refuse to take a check for less than what is due me. We are only talking about ~ $30 but at this point it is the principle. I won't let her make the decision about what I should charge. So to answer the initial question: more often than not.
 
I make them pay. 30 days go by, and I tack on 1.5% a month until paid in full. I am not a charity organization, and I sure will not let anyone dictate what I should charge. If its due to you, and in a contract, then by all means collect it!!
 

romexking

Senior Member
You should charge and collect a late fee for every invoice. I once had a contractor not pay on a couple of invoices for a construction project. When we went to court, one of the determining factors of me winning $80k (40k in interest!) was the fact that on the very first invoice, they were late in paying and I included the interest at 2%, and they paid it. That set a precedent for this project, and the judge awarded us the money. We still have to collect, but we are in the process of forcing the sale of their company owned home:grin: :grin:

Moral of the story....bill it and collect it!
 

Dennis Alwon

Moderator
Staff member
Location
Chapel Hill, NC
Occupation
Retired Electrical Contractor
quogueelectric said:
Who is Percy??????
WHO IS PERCY?????
Well it's Percy Sledge--
p19292ecf63.jpg
--- "When a man loves a women"


60's singer. We refer to the sledge hammer as Percy.

15025%20SLEDGE%20HAMMER.jpg
 

Sparky555

Senior Member
romexking said:
You should charge and collect a late fee for every invoice. I once had a contractor not pay on a couple of invoices for a construction project. When we went to court, one of the determining factors of me winning $80k (40k in interest!) was the fact that on the very first invoice, they were late in paying and I included the interest at 2%, and they paid it. That set a precedent for this project, and the judge awarded us the money. We still have to collect, but we are in the process of forcing the sale of their company owned home:grin: :grin:

Moral of the story....bill it and collect it!

I have a 30 day before/after Invoice (similar to utility Invoices) and send a Statement just before the 30 days. It's very effective & step one of several collection steps. If you loan your money for free some people will take advantage of you. Cash flow is one of the most important aspects of business & you need to be a collection agent.

Dave
 

Greg1707

Senior Member
Location
Alexandria, VA
Occupation
Business owner Electrical contractor
late payments

late payments

I am glad to see this thread since I am having trouble collecting from a costumer. I did someone work in May that was arranged through email correspondence. He is an out of state landlord. I told the fellow how much the project would cost ($1,600) and he agreed by email that I should proceed. The work was completed in early May . Now he refuses to pay until August or September because he claims that in the absence of a written agreement he is allowed a 90 day float. I have no idea what he is talking about. I have also done small jobs for people and when I asked to be paid at completion they have told me they are entitled to 30 days. Where does this come from? When I go to the store or the gas station I have to pay at the point of purchase. Same with the doctor or dentist. Am I missing something here? What is a 90 day float?
 

powerslave

Senior Member
Location
Land of Lincoln
Greg1707 said:
I have also done small jobs for people and when I asked to be paid at completion they have told me they are entitled to 30 days. Where does this come from? Am I missing something here? What is a 90 day float?


Sounds like a good question for your lawyer. I'll try to remember to ask mine the next time I see him.
 

satcom

Senior Member
If you really want to get the money fast, turn it over to collection, if they don't pay up the collection company sends out reports, and in no time at all, the customers credit is on the way down the tubes.
 

growler

Senior Member
Location
Atlanta,GA
Greg1707 said:
I did some work in May that was arranged through email correspondence. He is an out of state landlord. I told the fellow how much the project would cost ($1,600) and he agreed by email that I should proceed.

With an out of state landlord it's not a bad idea to ask for about $1599.00 of the total as a show of good faith before starting the job.

I'm not really joking. I have noticed that the more distance between the customer and you the less likely you are to be paid without some problems.

So I would put out of state landlord on my list of Red Flags.
 
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