Wise-Women List Archive File
Charging a Late Fee
Question:
Hello everyone, I am fairly new to your list. I've been reading for about
a week now. Looks like a supportive and knowledgeable group! Thanks for
allowing me to become a part.
I am writing because I have a question to ask. I am wondering if it is
customary to charge late fees on customers who constantly carry balances
etc. I have a client who literally owes me several thousand dollars. She
pays approximately $200 a month occasionally a little more on her bill.
Life and learn I know. I will not get myself into this situation again. At
any rate I do have a signed contract from her and it states very clearly in
the contract that there will be a late fee of a certain percentage charged
for past due balances with the minimum being $5.00. I thought that I was
legal in having this in my contract (all my creditors charge me for being
late) and she did read and sign this contract. Now she's beginning to bark
about her late fees.
Vicious circle because if she would pay her bill she wouldn't have late fees
right? LOL
at any rate, I'm wondering how many impose late fees for carrying balances
forward from month to month.
Hi and welcome to the list.
I too have a customer like this. She frustrates the bejabbers out of me.
I also have a contract that stipulates late fees and how and when they are
charged. She squawks constantly about it, but she knew they were there when
she signed the contract. I just keep gently reminding her that if she paid
her bills on time and in full, there would be no late fees and we'd all be
happy (at least I'd be happy....who really knows about her?).
Kind regards
Welcome to WW. It's good to have another WiseGuy onboard. (Forgive me
if you're actually [a woman].)
I think your late fee is legal, but I'm no contract law expert. We don't
carry balances forward, as our solution is to require payment of 1/2 in
advance and the balance prior to delivery. If clients have several on-going
projects, work on all of them stops when every a payment is more than 5 days
late.
We use the same methodology that [someone else] described: 50% due when the contract is
signed and the balance due upon completion of the website.
However! We've had a couple clients who drag their feet on the balance. We
decided that we need to modify our contract verbiage to indicate that if the
payment is not received upon services being rendered, the website will be
deactivated until payment is made. This is easy for us to do by simply
placing a temporary index page up so that the full website is not visible.
Once we receive the money, we'll get rid of the temporary homepage and the
website will be back to normal.
What do you all think is an appropriate time frame for payment before we
yank the site?
>I think your late fee is legal, but I'm no contract law expert. We don't
>carry balances forward, as our solution is to require payment of 1/2 in
>advance and the balance prior to delivery. If clients have several on-going
>projects, work on all of them stops when every a payment is more than 5 days
>late.
As they say live and learn right? This is how I do it NOW. Hindsight is
20/20. My most recent client was so anxious to get their site up on their
server. But the check that was in the mail never has arrived. They finally
paid with credit card which is just fine with me. The site was uploaded the
same day. thank god I had the strength to carry through and NOT budge on
going further. Even with all their prodding and begging LOL I will NOT
allow myself to get in this position again.
> What do you all think is an appropriate time frame for payment before we
> yank the site?
Whatever you specify in the contract. We base everything on 5 business days.
My philosophy is that either they have the money to pay or or they don't,
and I want to discourage them from hiring us if they don't already have the
funds in hand. I'm not interested in gambling on the client's future cash
flow.
> same day. thank god I had the strength to carry through and NOT budge on
> going further. Even with all their prodding and begging LOL I will NOT
> allow myself to get in this position again.
Good for you Sam aka Shari. Sometimes I think the hardest lesson we women
have to learn in life is about NOT being nice, accommodating, polite, etc.
My new mantra of the week is, "No, we absolutely do not sign Work for Hire
agreements. Our policy on this issue is not negotiable." It is amazing how
fast prospective clients drop the "prodding and begging" when my answers
leave no wiggle room.
> at any rate, I'm wondering how many impose late fees for carrying balances
> forward from month to month.
The companies I worked for have charged 2% of net for each month for
balances past due for more than 30. I can see letting a good customer slide
for one month for one time, and you're right in sticking to your contract,
IMHO.
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