Commercial Accounts and Late Fees | TruckMount Forums #1 Carpet Cleaning Forums

Commercial Accounts and Late Fees

Kevin Lietz

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Dec 9, 2016
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Hey everyone,

Been busy trying to grow the business lately, so I'm sorry I haven't posted in a while.

Just out of curiosity, how does everyone work out terms with commercial accounts, due dates, and late fees for past due accounts? Trying to get an idea of what is reasonable?
 

Robert86

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Recently I started adding a late fee into the contract (didn't use to). I give 30 days to pay, a late notice if no payment after 30 days, and a late fee of 10% the bill is applied after 45 days. I have 1 account that takes 45 days to process payments so I give them 60 days with late fee attached after 75. Thats one thing to look for, some companies just take a long time to process the check. Most commercial jobs I do though pay within 2 weeks of sending the invoice.
 

Scott W

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The first check may take some time from larger companies who are just getting you into the system. After that the check should come in 2 or 3 weeks.

I found some companies responded better to discounts and just ignored added on late fees. SO, I presented the price and invoices a little differently.
 

Sean M Collins

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The first check may take some time from larger companies who are just getting you into the system. After that the check should come in 2 or 3 weeks.

I found some companies responded better to discounts and just ignored added on late fees. SO, I presented the price and invoices a little differently.
My guess is that’s common I’ve had the same experience
 

rob allen

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I do my absolute best to get paid on the first visit and then establish an open account later. Maybe thats why I don't have much commercial.
 

floorclean

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Dale MacDonald
I’ve never ever added a late fee to my commercial accounts and I’m 95 commercial. Personally I think it’s the one thing you can do to piss them off a lot. I’ll agree with Scott your far better to have enough flexibility to give a discount for 30 day payments then to go in the other direction.
 
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Tater

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Richard Whithers
I just have net 21 on my invoice, at least that can be seen by the accounts payable team. Never would charge a late fee but on my next visit I might ask if there was a way to get paid quicker if I needed to. I did have a guy tell me once to back date the invoice because they paid at 30 days per invoice date. Creative Bookkeeping!
 
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Kevin Lietz

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Dec 9, 2016
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Kevin Lietz
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I’ve never ever added a late fee to my commercial accounts and I’m 95 commercial. Personally I think it’s the one thing you can do to piss them off a lot. I’ll agree with Scott your far better to have enough flexibility to give a discount for 30 day payments then to go in the other direction.
I for the most part agree with you, and most of my commercial accounts I have zero problem. However I have one restaurant chain with 2 stores that corporate is not doing there freaking job. I don't mind setting up longer terms, but I keep getting told "the checks in the mail" and I get nothing. I'm now 60 days out on one batch, 30 out on the next... which wouldn't be that big of a deal except I can't get a straight answer, ya know?

Am I being unreasonable?
 

Pioneer Floorcare LLC

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I for the most part agree with you, and most of my commercial accounts I have zero problem. However I have one restaurant chain with 2 stores that corporate is not doing there freaking job. I don't mind setting up longer terms, but I keep getting told "the checks in the mail" and I get nothing. I'm now 60 days out on one batch, 30 out on the next... which wouldn't be that big of a deal except I can't get a straight answer, ya know?

Am I being unreasonable?
Fire them and put your energy to better clients. I fired a 600 room hotel and a 400 room hotel this year. Very scary to do, but looking back I am sooo glad.
 

Robert86

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I for the most part agree with you, and most of my commercial accounts I have zero problem. However I have one restaurant chain with 2 stores that corporate is not doing there freaking job. I don't mind setting up longer terms, but I keep getting told "the checks in the mail" and I get nothing. I'm now 60 days out on one batch, 30 out on the next... which wouldn't be that big of a deal except I can't get a straight answer, ya know?

Am I being unreasonable?
I've been there. Got an account, 2 stores, one month I get a check within 2 weeks (as its supposed to be with this company) and then the next, nothing. 3 months later I keep getting told its in the mail and nothing. Every month I call the company, send new invoices, "you'll have it within 2 weeks" and 4 weeks later, nothing.

That's when I sent an email stating a new billing policy. Simply, payments must be received within 30 days of the invoice being sent. If no payment is received then a notice will be emailed alerting them and if no payment has been received or no one has contacted me to arrange something within 15 days of the late notice and ammended invoice will be sent that includes a late fee.

I sent the email and called the company, explained this new policy and that the times can be changed if their process makes payment within 30 days unrealistic. I asked that they read it and call with any questions or concerns, and if everything looks good to send me a signed copy. I never accused them and was calm and polite. Just made it out as a general change in billing practices for my company and they had no problems with it. Next day I received a signed copy and a follow up call. I have yet to send a late notice.

A friend of mine uses this same practice, he sends a couple notices out every year (normally to the same client). Like me, he prefers to email them but will also mail them if the client prefers. He always accompanies the notice with a phone call so there is verbal confirmation that payment is late. And we have both found clients appreciate this. Be flexible in the details of the policy as every company works differently. School district I used to work for took 60 days to pay their outside contractors. Not going to charge a late fee after 30 days if they've told you ahead of time that they take 60 to pay. Clear, calm, communication always helps.
 

Kevin Lietz

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Dec 9, 2016
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Kevin Lietz
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I've been there. Got an account, 2 stores, one month I get a check within 2 weeks (as its supposed to be with this company) and then the next, nothing. 3 months later I keep getting told its in the mail and nothing. Every month I call the company, send new invoices, "you'll have it within 2 weeks" and 4 weeks later, nothing.

That's when I sent an email stating a new billing policy. Simply, payments must be received within 30 days of the invoice being sent. If no payment is received then a notice will be emailed alerting them and if no payment has been received or no one has contacted me to arrange something within 15 days of the late notice and ammended invoice will be sent that includes a late fee.

I sent the email and called the company, explained this new policy and that the times can be changed if their process makes payment within 30 days unrealistic. I asked that they read it and call with any questions or concerns, and if everything looks good to send me a signed copy. I never accused them and was calm and polite. Just made it out as a general change in billing practices for my company and they had no problems with it. Next day I received a signed copy and a follow up call. I have yet to send a late notice.

A friend of mine uses this same practice, he sends a couple notices out every year (normally to the same client). Like me, he prefers to email them but will also mail them if the client prefers. He always accompanies the notice with a phone call so there is verbal confirmation that payment is late. And we have both found clients appreciate this. Be flexible in the details of the policy as every company works differently. School district I used to work for took 60 days to pay their outside contractors. Not going to charge a late fee after 30 days if they've told you ahead of time that they take 60 to pay. Clear, calm, communication always helps.
Exactly my point! But I like the format your using. That's a good strategy :)
 
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floorclean

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Dale MacDonald
The only thing I’d add to this topic is never forget it’s far easier to keep one customer than it is to get one new one. My company always invoices 30 days prior to the services being preformed. That works with janitorial not so sure it would with just carpet cleaning. I value my customers like gold. Even the very worst customer I’ve had over 30 years I swallowed a lot and turned on the charm. The best talent one can learn in business is to turn shit into cash!
 
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