Posted by Rebecca/CA on 7/31/06 7:38pm
Msg #136383

Does anyone charge late fees for unpaid invoices?

I have several companies that are late paying and was thinking about charging a late fee. Does anyone know if this is something that we can do or has anyone else done the same and if so what would be the standard late fee charge.

Reply by ME/NJ on 7/31/06 7:51pm
Msg #136385

We do after 60 days $25.00 and after 90 days we add all collection and legal cost. Very few get past 60 days. Most of our clients pay within 21-30 day period.

Reply by Jeanne/ca on 7/31/06 8:19pm
Msg #136392

when someone has not paid me on time, I send them a invoice stating they are xx days late and that if they do not pay me within 10 days from the date sent out then they will incur a $35.00 late fee. And it works EVERY time for me! Only once did someone not pay me in the ten days, but then I sent them another letter showing that on top of the $35.00 late fee that they now owe me, they will now incur a $5.00 charge for everyday not received. I got that payment with the first late fee by fedEx the next morning.

Reply by Rebecca/CA on 7/31/06 8:24pm
Msg #136397

I like that idea....I had a similar idea, I'm sure if I was the person receiving your letter I would also be sending it overnight (probably early am, sig. required, etc.). Thanks for the input.

Reply by Jason on 8/1/06 6:04am
Msg #136433

Good strategy, Jeanne

I put a $35/week late fee wording at bottom of every invoice. I give 'em 6 weeks to pay before it goes into effect.

I don't expect to get it. It is there in case I need to take a bum to sm claims court.

If they're going to put me through that grief, I want them to pay me a lot extra.

But I'll use your strategy before filing suit.

ps
I also put this clause "Full payment expected by title company whether or not loan closes and funds." I'm not going to let them shab me off to a broker and try to collect from him.

Reply by Rebecca/CA on 7/31/06 8:21pm
Msg #136393

OK, thank you. I don't normally have trouble collecting from people but a few have been overdue for some time now and I just wanted to make sure I can "legally" charge a late fee. Maybe that will get them off their backsides and pay up.

Reply by Danny_FL on 8/1/06 9:05am
Msg #136443

I had my attorney draft up a letter that I send (email or with invoice) that explains what will happen, in progressive order, on late payments. Fees, compounded interest, collection charges, court costs, in very detailed legal terms. Have not had a problem yet.

Danny

Reply by SanDiegoCA on 8/1/06 12:30pm
Msg #136472

Danny, I think you on the correct track there.

I'm not an attorney, and the following ISN'T legal "advice", but I do know something about payment terms in general.

I don't believe that you can stick a customer with a late fee after the fact, that is, for it to hold up in court you would have had to disclose said late fee before any service is rendered, and have the customer acknowledge that penalty in same way.

And, if you think about it, adding the penalty after the fact is not really fair. It would only be fair if the penalty was disclosed and agreed to before the service is done and the fee for it generated.

If you reverse your position with the customer's, would you agree that it would be fair?

Reply by SanDiegoCA on 8/1/06 12:31pm
Msg #136473

Left out the word ARE. Please insert it where needed when reading!!

Reply by SharonMN on 8/2/06 10:15am
Msg #136687

Re: Late fees for unpaid invoices - avoid usury

$35 late fee on a $100-$200 assignment is probably usury, as is $5 a day late fee. Late fee isn't a bad idea, just make sure it is within the limits of your state's usury laws (there is a max. APR you can charge). Otherwise the entire contract can be dismissed and sometimes you can even have to pay the other party as a penalty.

Another problem, of course, is that if a signing service doesn't want to pay you what they owe, they probably will ignore the late fee as well.

Reply by BrendaTx on 8/2/06 10:24am
Msg #136693

Re: Late fees for unpaid invoices - avoid usury

Sharon, you are a smart cookie. If they have a brain they will know it's usury and laugh at you.