What do you charge as a late payment fee?

[Doug in NC]

I have stated $25 as a late fee if payment is over 45 days past invoice date, but I have never collected. I usually go ahead and put terms on the initial invoice when it is not a regular client.

Does anyone ever collect on late fees, or are they ignored as mine are? Fortunately, my regular customers generally do pay within 45 days, it's the non-regulars that I have to worry about.

I suppose I need to decline all orders from newbies who won't pay upfront. They're not worth the collection headaches and waste of time.

 

[Tim Hicks (Texas)]

$25 per 30 days late. This is posted on every invoice. Good clients that are slightly late get the fee waived. Bad clients that take too much time to collect, I am happy to get the original fee and never work for them again without payment up front.

 

[Pamela Crowley (Florida)]

Here is what I put on my invoices:

TERMS: PAYMENT DUE UPON RECEIPT OF COMPLETED APPRAISAL
Subject to Florida Dept. of Banking & Finance Statute Title XXXIII, Chapter 494, specifically 494.0072 (q)
LATE CHARGES OF $25.00 PER MONTH WILL BE ADDED AFTER 30 DAYS

DUE AND PAYABLE IMMEDIATELY

CODs still get the same thing and the invoice is in the name of the lender that ordered it. The only difference is what's at the bottom.

Paid in full upon confirmation of check clearing - No Refunds

or

Paid in full upon confirmation of charge clearing - No Refunds

Yes, I have collected late charges.

 

[Mike Simpson]

I've never collected or charged a late fee!

After 90 days & new invoices sent every 30 days--I call. Depending on how the phone conversation goes (& a promise of quick payment)--I refuse new orders & tell them I intend to file a complaint with the Department of Financial Institutions.

Of course this kills any future business with that particular company but, who cares? There's just too many other potential clients who are only too happy to pay in a timely fashion.

I've always been able to collect my fees with this policy--they're scared of the Department of Financial Institutions.

I don't accept orders from out of state lenders--don't need em, and I'm overwhelmed with local orders.

In the early days I had one Mortgage Broker offer to pay 12% interest if I'd wait 60 days longer (after nearly a year of non-payment). I agreed, he paid up w/12% interest on the 60th day & we've since parted ways.

I don't have this problem w/non Mortgage clients--fee's collected up front. Attorney's are the only ones who make Mortage Brokers look like choir boys when it comes to non-payment.

-Mike

 

[jtrotta]

Never had to go after a late fee, always collected within thirty days if I billed; 99% of our work is "Collect At Inspection"; also I have all checks made out to me personally and go right to their Bank and cash the check, ya can't drink water from a dry well :lol: :lol: .

Over the years, I have had the opportunity to review mega contracts, the best ones I've seen to date are builder contracts, as they pertain to all aspects (including weather). here is a light version, if you need the real deal, I'll have to go find it;

Fee Payment Schedule;
It is hereby agreed & acknowledged that XYZ Appraisal Service does not extend credit and all appraisal assignments are to be "Paid At Inspection". If we are asked to extend credit for a particular assignment, such assignment will be subject to additional expenses. These assignments must be paid within 72 hours of reciept and will include; shipping / handeling/ and appropriate tax due. If for any reason the Fee Due is not paid by the due date noted, a "Late Fee" of $20 per day will be assed as liqudated damages for losses in delay of payment and only XYZ Appraisal retains the option to waive any & all Fee's due & owing.

There is more to this, but you get the idea - I hope, simply put it's best if you get paid up front.

Good Luck
8)

 

[Mike Garrett RAA]

I just had to change an invoice so I could deposit a check that included a $25 late charge. Here is how I handle it. Invoice says:

Payment due upon receipt of report. A late charge of $25 will apply after 25 days. Beginning with the 30th day, interest at the rate of 18% per annum shall apply.

Do they pay? You bet! Just forget to make a payment or make it late on your credit card and see how much they charge! Don't let them fund their business on the backs of the appraisers!

 

[Charlotte Dixon]

$15/month over 30 days, but I've been so busy, I've fallen down on that collection procedure.....except for ONE. Appraisal was done in July. In December I sent invoice #12 noting that the late fees had risen to $90, and starting in January 2003 the late fee per month would be increased to $20/month. Their response????? "O.K. we submitted your invoice again" :evil:

 

[Richard Carlsen]

We've never charged a late fee. Judy stays on top of this fairly well although the past 3 months have been hard as busy as we were.

New policy this years is the same terms for past clients: Net 30 days

CODS: Certified funds or cash at the time of the inspection except for folks who specifically request us or for whom we've done work before.

For all others, we will take personal checks mailed to us but the inspection will not be scheduled until the check clears our bank.

No more freebees.

 

[Doug in NC]

Thank you all for the input. I will incorporate some of these ideas into my invoice process. I am looking forward to another good year, but with fewer collection problems (actually, I only have a handfull to worry about but one or more are too many in my book).

 

[Pamela Crowley (Florida)]

Here is something else I've just decided to add to the invoice:

Borrower COD payment does not obsolve the Client/Lender from responsibility if the borrower's check is not paid for any reason or their credit card payment is denied for any reason.


All invoices are "Billed to" the Lender/Client. They are the ones responsible and it doesn't matter who pays it!