Can I charge interest on my unpaid invoices?

[Mike Lang]

I don't know about any of you guys but I'm having a little trouble getting paid these days. I was looking to charge interest on my unpaid invoices after 30 days. Does anyone already do this or know anything about it. How much can I charge ? I 've heard 1.5% is the max ?

I've filed a few construction liens lately but with the housing market as it is I don't expect to get my money for quite some time. It would be nice to collect something on that money while it's sitting.

 

[satcom]

I don't know about any of you guys but I'm having a little trouble getting paid these days. I was looking to charge interest on my unpaid invoices after 30 days. Does anyone already do this or know anything about it. How much can I charge ? I 've heard 1.5% is the max ?

I've filed a few construction liens lately but with the housing market as it is I don't expect to get my money for quite some time. It would be nice to collect something on that money while it's sitting.

I noticed your in Jersey, have you talked the AHJ they may be able to help, provided the job passed inspection.

 

[Fulthrotl]

I don't know about any of you guys but I'm having a little trouble getting paid these days. I was looking to charge interest on my unpaid invoices after 30 days. Does anyone already do this or know anything about it. How much can I charge ? I 've heard 1.5% is the max ?

ya can charge whatever you want.... i think it's more a question of how much
can you get *paid*......

on a project we had a sand supplier, who was providing sand for a pug mill
that we were using for a custom slurry, to prevent groundwater migration
thru sewer and duct bank trenches.

he was half the cost of anyone else, for sand that met the qualifications.
it was about $350,000 worth of sand. his contract had a stipulation that
he be paid with cashiers check within 24 hours of the last truck load of sand
being delivered.

the contract also had a charge of 10% of the total contract price for every
DAY that the invoice went unpaid. nobody even blinked. it was obvious that
getting paid was something of a priority to him.

put whatever language you want in your contracts going forward. for the stuff
on the books, if you don't have language allowing for finance charges in existing
contracts, you may have damages awarded by a judge, after you sue, but other
than that, about the only thing you've got is a lien you can file against the
project you worked on. it varies from state to state, obviously. YMMV.
if you can get a lien filed before a certificate of occupancy is issued, you
have a lot of leverage... if not, well......

that company that did the trenching... i'm still getting calls on my personal
cellphone, trying to collect money that subs have due. it's been three years.

on todays market, if you can just get the money, consider yourself lucky, and
keep future work on a shorter leash....

good luck on your collections.


randy

 

[Rewire]

In our state you can only charge interest if it is agreed upon buy ahead of time by the person owing you money. On all our work orders it states 17% interest billed monthly on all amounts 30 days past due

 

[480sparky]

Ask your lawyer.

 

[hardworkingstiff]

Ask your lawyer.

More overhead? :smile:

 

[480sparky]

More overhead? :smile:

Cost of doing business.

 

[Rewire]

If you are in business and haven't consulted with an attorney you are just increasing your exposure to liability.

 

[Mike Lang]

I have a few friends who are lawyers but you know how that goes... you can help them out with electric around their house but when it's their turn to repay the favor they can't help, or do a poor job.

From what I've seen and heard of recently, I'm going to charge a 1.5% monthly finance charge. I doubt I'll ever see it maybe it will just help me collect the actual amount owed to me.

 

[480sparky]

My invoices clearly state that after the due date, I start charging interest. On occasion, someone doesn't pay, and next month I get a payment for the increased amount.

 

[Mike Lang]

Yea I've really got to start being a real ball breaker when it comes to collecting money. It's a whole other job in itself for me right now. I'm guessing i'm not the only one.

 

[Rewire]

Had a client owe me $600.00 over 90 days Made a call and they said they would send half that day two days later got the check it was for $50.00 talk about mad

On the other side got a client owes $90.00 got a note with $20.00 enclosed telling me they were having financial difficulty but would send payments,husband and wife both laid off when our big factory closed.

I will work with anybody just be straight with me

 

[cowboyjwc]

Isn't adding interest on a late bill kind of like the joke. "You're charging me a late fee?" "Yes" "So let me get this right, your charging me more of what you already know I don't have?"

I agree that you can charge whatever you want, but if you can't collect the $600, what makes you think you're going to collect $600 + 1.5%?

Maybe they're the kind of people that put names in a hat and then pull out 5 and pay those. Make them mad and they might just take your name out of the hat all together.

 

[jrannis]

For me,
Quickbooks adds interest in automatically. I just send the statements out.:roll:

 

[satcom]

Maybe they're the kind of people that put names in a hat and then pull out 5 and pay those. Make them mad and they might just take your name out of the hat all together.

Your name did not come out yet, I think all electrical customers use that method.

 

[weressl]

I don't know about any of you guys but I'm having a little trouble getting paid these days. I was looking to charge interest on my unpaid invoices after 30 days. Does anyone already do this or know anything about it. How much can I charge ? I 've heard 1.5% is the max ?

I've filed a few construction liens lately but with the housing market as it is I don't expect to get my money for quite some time. It would be nice to collect something on that money while it's sitting.

The announcement of late fees, or charges should be part of the original Contract either in writing outlining your terms and conditions or verbal if your State recognizes such as valid. It is of coruse best to check what is legal in your State and how State law protects you, the Contractor.

 

[SmithBuilt]

I like nice round numbers so I use 2% per month. I also charge a late fee like the credit card co's.

I have only collected the late fee and interest on one customer. The other went bankrupt. I have it printed on the estimate and feel it sets a good expectation.

 

[smo]

I think it is a good idea to have it stated in your contracts. I have it stated, but I rarely use it. I don't charge it automatically, I use my own discresion on each case.

Some people may put off paying bills which don't have any interest or late fees in favor of paying those that do. Charging interest in an encouragement for the customer to get you high on the priority list. If you don't have any penalty for paying late, why wouldn't they pay you late?

 

[480sparky]

I like nice round numbers so I use 2% per month. I also charge a late fee like the credit card co's.........

You may be breaking the law. Have you checked out what you're legally allowed to charge?

 

[weressl]

I think it is a good idea to have it stated in your contracts. I have it stated, but I rarely use it. I don't charge it automatically, I use my own discresion on each case.

Some people may put off paying bills which don't have any interest or late fees in favor of paying those that do. Charging interest in an encouragement for the customer to get you high on the priority list. If you don't have any penalty for paying late, why wouldn't they pay you late?

If you don't apply it consistently, you may have difficulty having it stand up in court.