Home – New Forums Money matters Late Fees For Monthly Payments?

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  • #981933
    GSanders12
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    Hi guys, I’m from Sydney. In my lawn care company I am offering a full maintenance contract for all year round on a weekly basis. The client will pay each month a monthly payment.

    What are the laws regarding late payments and how what percentage of an increase should be in the late fee payments if the person fails to meet the date to pay? Along with how long I should give them until I charge them a late fee? (They pay on the 1st of every new month.)

    Thanks

    #1133788
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    Hi – I think you are better off having a slightly higher fee and giving a discount for early payment. The discount would add up and be offset after 3 or 6 months. Just a thought.

    #1133789
    igatax
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    KarenC, post: 152156 wrote:
    Hi – I think you are better off having a slightly higher fee and giving a discount for early payment. The discount would add up and be offset after 3 or 6 months. Just a thought.

    I agree with Karen. Late Fees are not an attractive way of keeping your regular customers. Discounts for early payment IS an attractive and sustainable option.

    In any event, you would need to ensure that your Terms & Conditions spell out your terms and what will happen if any terms are breached. Any number of lawyers or accountants in Sydney will help you with your T&Cs – don’t try to write them yourself.

    Good Luck!

    #1133790
    Cash Flow is King
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    GSanders12, post: 152136 wrote:
    Hi guys, I’m from Sydney. In my lawn care company I am offering a full maintenance contract for all year round on a weekly basis. The client will pay each month a monthly payment.

    What are the laws regarding late payments and how what percentage of an increase should be in the late fee payments if the person fails to meet the date to pay? Along with how long I should give them until I charge them a late fee? (They pay on the 1st of every new month.)

    Thanks

    Let me add my voice to the chorus – I strongly agree, use a carrot to motivate your customers to pay early, rather than a stick to punish them if they don’t !

    You also asked about the size of the late fee. I’m not a lawyer, but my commercial experience is that the courts DO NOT like this sort of fee to be a penalty. If you are going to go down this path, it needs to be a genuine estimate of the costs incurred.

    I suggest you take some legal advice, or consult a professional debt administration business. An ounce of protection and all of that …

    #1133791
    GSanders12
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    Hey everyone, thank you for the replies. The discount seems much more appealing then punishing with a late fee.

    I was wondering another alternative such as this: Direct debit that would automatically take the money out similar to a mobile service? Our payment model is the same as mobile service and they will pay each month (it is a maintenance service.)

    So how would DIRECT DEBIT work out for my situation as compared to a DISCOUNT if they pay on time?

    Cheers

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