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Late Fees


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  #1  
Old 02-21-2012, 02:41 PM
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Default Late Fees

I am getting ready to send out contracts for this upcoming season and am thinking about increasing my late fees. Right now I only charge 2% compounded on payments 30 past due. What does everyone else charge? I didnít look into it fully yet so I donít know if there is a cap on how much you can charge legally but I am tired of waiting for payments and I think half the people donít mind paying 2% if it buys them some time. Like right now I have a snow removal customer that owes over a grand, and I feel that they are just going to wait it out and just pay me the $20 in late fees, itís not worth it anymore I have way too much overhead (especially with snow removal) to wait on money for months at a time. What does everyone think?
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Old 02-21-2012, 03:00 PM
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I give them 10 days or 15% fee every 30 days. At 2% your the cheapest loan out there and you will be the last thing paid. I have had only one customer say "you sound like a bank with that fee" I told her "I plow on time and I only think its fair to get paid on time" when i put it like that she understood
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Old 02-21-2012, 03:20 PM
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I think you should only accept post-dated checks.

This way you know you will be paid for the work you do. Imagine this situation;

A client missed the payment due date, yet you have arrived to his property. You decide to cut the lawn.

Problem;

a) Imagine if you had 20 clients like this, how unorganized would you become? Very. Running a business based on 'trust' will destroy you.

b) The client still doesn't pay you. You are beginning to feel ripped off. Your brain starts thinking, "The customer is a nice person, but I just can't keep harassing them for money, they will think I'm a bad person". You continue to mow their lawn half arsed (to feel better about yourself). You let yourself become miserable, and now your quality looks awful aswell.

c) You stop cutting their lawn. The client now calls and makes you feel guilty, "You know you could trust me. I will have the money, promise". You are stuck taking their promise again, or putting your foot down and upsetting the client. Upsetting the client means you have made things awkward between the both of you, you are now unhappy every time you visit them to do your job.


In other words, accept post-dated checks ONLY!

Pros:
Never have the chase a client (security for you)
Client gets to cancel the checks any time (security for the client)

Cons:
None

Last edited by CHEESE2009; 02-21-2012 at 03:23 PM.
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Old 02-21-2012, 05:09 PM
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i charge 10% as soon as it is 10 days past due which starts when they receive the bill and it jumps to 23% after 30 days.
if they complain about the late fee i tell them pay the bill on time and there will be no fee.

i could care less what they think about the fee and frankly, if they can not pay their bill on time i don't even want them as a customer.
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Old 02-22-2012, 01:34 PM
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Can you get some/all of them to pay in advance each month?
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Old 02-22-2012, 02:25 PM
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Thanks guys for the info, these are old contracts that I have had for probably 4 years and at the time I just went by another landscaper and one of my suppliers. I just assumed that 2% was probably the norm or the legal limit. I am definitely increasing the fees this season.
As for payment in advance, I would love to but there is so much competition out there that doesnít require payments in advance that I am a little leery that I would lose a job or two. A lot of my property managers are picky, god forbid I make them do a little more work than they are used to. I have put out there that we can do automatic withdraws for the seasonal contracts but no takers. I was thinking about requiring automatic withdraws on the 1st of every month for all seasonal snow work for next year. As everyone knows we are always wrong, we are just supposed to do the work and expect payment when it comes it comes no rules for customers right? If I didnít have your property plowed and clear by 7 am I get complaints all day, but if you donít pay your bill on timeÖoh well deal with it! Must be nice to be a customer huh?
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Old 02-22-2012, 03:01 PM
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Quote:
Originally Posted by FaccLndscpng View Post
Thanks guys for the info, these are old contracts that I have had for probably 4 years and at the time I just went by another landscaper and one of my suppliers. I just assumed that 2% was probably the norm or the legal limit. I am definitely increasing the fees this season.
As for payment in advance, I would love to but there is so much competition out there that doesnít require payments in advance that I am a little leery that I would lose a job or two. A lot of my property managers are picky, god forbid I make them do a little more work than they are used to. I have put out there that we can do automatic withdraws for the seasonal contracts but no takers. I was thinking about requiring automatic withdraws on the 1st of every month for all seasonal snow work for next year. As everyone knows we are always wrong, we are just supposed to do the work and expect payment when it comes it comes no rules for customers right? If I didnít have your property plowed and clear by 7 am I get complaints all day, but if you donít pay your bill on timeÖoh well deal with it! Must be nice to be a customer huh?

those are not the rules and they only become the rules to those who choose to accept them.
what would paying ahead instead of behind change for them ? they have to pay you anyway and after the first bill it is monthly from there just like they are doing now.
no other other type of business is gonna do squat for anyone without some upfront cost why should they expect anything different.

you can not go by what other landscapers do because the fact of the matter is most landscapers are poor businessman and outside of cutting a lawn they don't know the first thing about being in business.

think about every trade out there, they usually have to work for someone in order to learn the industry and learn how to be successful and most landscapers start out as some dude who bought a lawnmower and decides to call himself a landscaper.
who do you want to model your business as, a professional or just some trade jumping hack.

if you present your case to your customers in the proper manner and convey to them that with the rising costs of doing business that you can not longer offer the best possible service and be bank of america at the same time.

ask them if they submit their hours to their boss for the entire month and wait for him to pay them when he feels like it, i doubt it and they would be crying to the department of labor faster then the jews left christ.

i am sure some won't like it but if they don't it's probably more to do with that they want the option of screwing you if need be then about anything else and you probably don't want them as a customer to begin with.

as they say, you got to break some eggs if you want to make a omelette.

after the first visit on every property i service for the year they get a bill for the month and then the bills go out on the 24th of the month thereafter and i work exclusively for high end commercial properties and i have yet had a person quam about it. and i would think a customer that is paying 15 k a month would say something before a lousy homeowner paying a couple hundred dollars a month.

wew, i am glad i got that off my chest, forgive me if i came off too strong but i get worked up when i hear about other guys being nervous about asking for the money they worked their tails off for.
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Old 02-22-2012, 03:33 PM
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I agree with you totally, landscapers are treated like crap. But with the state of the economy many people are jumping through hoops to get work and if myself and another company are charging pretty similar but I require payments in advance I could see the other guy getting the job, unfortunately. With the state of the economy I even started noticing some of the commercial properties in my area being serviced by ďan old man with a pick upĒ, they can have the residentials but now their making their way into the commercials? That isnít right! Thanks for the input guys I hear ya totally.
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Old 02-22-2012, 06:58 PM
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Quote:
Originally Posted by FaccLndscpng View Post
I agree with you totally, landscapers are treated like crap. But with the state of the economy many people are jumping through hoops to get work and if myself and another company are charging pretty similar but I require payments in advance I could see the other guy getting the job, unfortunately. With the state of the economy I even started noticing some of the commercial properties in my area being serviced by ďan old man with a pick upĒ, they can have the residentials but now their making their way into the commercials? That isnít right! Thanks for the input guys I hear ya totally.
if you do a good job, your honest and your customer is happy with your services billing ahead will be a non issue, as i said earlier, they have to pay you anyway and one benefit right off the top they will get is they will be done paying you for the year one month earlier which will be just in time for christmas.
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Old 02-24-2012, 09:38 PM
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I say we go back to voilence, nothing gets you paid quicker!!
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