Enforcing the 1.5% penalty
I have a consulting client that is is beyond 30 days on a final payment. Its a remote customer meaning I have been dealing with them via phone and email.
They said its going to be beyond the 30 days to issue payment. My invoices state 1.5% penatly if beyond the 30 days but how do I really enforce that if they don’t add it to the check?
I don’t think they are going to and not sure if I have any recourse but just curious what your thoughts are?
instead of discussing this with us no goods, I would send them and updated invoice to include the upcharge via email with a stamped envelope follow up right now!!
QB's has a statement option. Print it out, add the 1.5 in the over 30 days and mail it off.
Now, if the 1.5 is tiny-don't bother-just get the main stuff. If it amounts to a good dinner-tack it on.
A Great Place for Information, Comraderie, and a Sucker Punch.
Remodeling Contractor just outside the Glass City.
No matter how small the amount is, add it on and send them a new invoice. Do this now and next month and the one after.....etc, until you finally give up or decide to take them to small claims court. The interest may not be important, but the constant reminder will help keep them honest. If you do ultimately sue, the invoices will create a record of your attempts to collect and, more importantly, show a judge that they are scumbag deadbeats.
Most mid-size business owners know that smaller suppliers can't afford to enforce interest charges on overdue accounts, so a lot depends on your relative 'power' status. If this is a company you did some consulting for, and that company is bigger than your company is, you're not gonna get it short of taking them to court.
If, OTOH, you're the bigger fish in this fishbowl, and there is any possibility they may need you again at any time in the future, you're in a much better position.
However.... You mentioned that they told you it's going to be paid late; I infer from that that they may be dealing with a specific problem (like collecting from their client) and aren't deadbeating you just 'cause they can. In that case, next time you speak to them you might suggest to them that they bill late-charge interest to their client, since they're gonna have to pay interest to you when they finally get the dough to do so.
Or, like Calvin said, if it's only peanuts' or a beer's worth, forget it unless you need to establish the principle for future dealings with this client.
How now, Mighty Sauron, that thou art not brought
low by this? For thine evil pales before that which
foolish men call Justice....
When they send the check...cash it and be thankful.
I would not feel at all bad about tacking on the charge. first they owe you money, then they are borrowing from you to finance their project.
thats gotta be worth something
Well, I have tacked it on but still awaiting their payment!!!
Mike, you have to do like a landlord I know does.
Increase your price 10% and give them a 10% discount if paid in 10 days. I have found companies take notice of discounts and ignore penalties.
... if you can get the extra 10% in the first place. At least one guy I know charges 10% extra for commercial jobs because he knows he'll rarely get the 10% retention after the job is done.
I learned to do that years ago, whenever I could!
I also tried to find change orders, but that is another story!