jwright282
Member
Can anyone tell me what the interest rate is that can be charged to customers that have not paid their invoice?
Late charges & Interest for Past Due Invoices
- Thread starter jwright282
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- Location
- Lockport, IL
- Occupation
- Semi-Retired Electrical Engineer
Whatever interest rate and penalties you specified in your fee proposal, or that appear in the contract between yourself and the customer. I am not at all sure you can collect something that is not agreed to, in writing, at the begining of the job.
Unless US contract law is fundamentally different to that in the UK, and I don't think it is, I agree with your point.
That is about it, every state has different rate limits, but your accountant/ attorney should of had the right rates for your state when you had your contracts, proposals, and invoices printed.
In most states, you can not charge intrest charges that have not been agreed to, in writing, before the job is started.
Pierre C Belarge
Senior Member
- Location
- Westchester County, New York
We had this conversation with a construction attorney 2 nights ago.
In NY, if you have it in writing, either in the proposal or on the invoice, you will be able to possibly collect a fee.
If you do not put it in writing and get the customers signature either on the proposal or invoice, your chances of collection are almost nil. If it goes to court, and you have not put it in writing with a signature, no matter how good of an attorney you have, it will be thrown out of court.
The maximum value is 24.99% for 12 months. He told us the standard fee charged is 1.5% per month.
In NY, if you have it in writing, either in the proposal or on the invoice, you will be able to possibly collect a fee.
If you do not put it in writing and get the customers signature either on the proposal or invoice, your chances of collection are almost nil. If it goes to court, and you have not put it in writing with a signature, no matter how good of an attorney you have, it will be thrown out of court.
The maximum value is 24.99% for 12 months. He told us the standard fee charged is 1.5% per month.
That rate is for for non contract, consumer purchases, i bit more involved, for example banks are allowed to charge up to 29% per month, and up, they were releaved of requlation in the early 90"s one of the problems we are seeing first hand today, the banks legal right to steal at will from consumers, 20 years ago a credit contract, with a bank on average was a 3 page contract, today they are almost 30 pages of fine print and all legal. As part of your CEU's try a contract law course, if you are in business, it is well worth the time.
Pierre C Belarge
Senior Member
- Location
- Westchester County, New York
I do not think the question is related to what banks can charge.
I do agree that a local class in business is a great idea.
But it is related, he can offer his customers a bank credit agreement, after the job is completed, he can even offer terms, like 90 days no interst, or whatever special offers the credit company has, he will also pick up a piece of the action from securing the credit customer.
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Pierre that's the way that I understand it as well.
growler
Senior Member
- Location
- Atlanta,GA
I know one apartment owner that's found away around the Usury Law's ( maybe). The example he gave me is this. He rents an apartment for full value of say $1200 a month but if the tenant pays on time then it's at a discount rate and the bill is only $1000 for the month or a 20% discount.
He list it in the lease as a discount and not a penalty. If they are more than a few days late then he bills at full value plus interest.
Could be something to look into, discounts or regular rates for payments made on time. Deadbeat rate for all others.
He list it in the lease as a discount and not a penalty. If they are more than a few days late then he bills at full value plus interest.
Could be something to look into, discounts or regular rates for payments made on time. Deadbeat rate for all others.
zbang
Senior Member
- Location
- Roughly 5346 miles from Earls Court
My invoices say "Due on receipt. Interest of 1.5%/month may be charged on past due balances." Sometimes I'll say "Due within 15 days of date of invoice". Also, I don't always charge the interest at all, since I know some clients are slow, but -will- pay up. (One large corp. had a 50(!) day payment cycle, but it was a rock solid 50 and they never questioned an invoice.)
The apartment thing sounds like a "2 ten, net 30" sort of thing- take a 2% discount if paid within ten days, otherwise, you have 30 to pay the full amount.
The apartment thing sounds like a "2 ten, net 30" sort of thing- take a 2% discount if paid within ten days, otherwise, you have 30 to pay the full amount.
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