What are your late payment policies? - Virtual Assistant Forums

Tess · #1 (**permalink**) 12-10-2007

We've had discussions here at the forums around this topic, but I thought I'd start it as a thread of it's own - inspired by a recent conversation with a fairly new VA who did not include a late payment policy in her contract/letter of agreement and is now having a hard time getting a client of only three months (who also was not asked for an initial deposit) to pay an invoice. The invoice is now overdue by 43 days...

SO - with all of that in mind...please take a moment to share your own late payment policy, either with the actual wording that you use in your documents or with a basic description of how you handle late payments.

Hopefully, having the info more visible will help those who are developing their policies and contracts remember how important it is!

Also, if you do have late payment policies in place, have you ever had to enforce them? If so, what methods have you used to help your clients reconcile the overdue invoice(s)?

vainparadise · #2 (**permalink**) 12-10-2007

Never had to enforce any late payment issues with my work. I haven't had to use a policy as of yet, my 3 clients I work for from up north I have been doing work for since before creating this business.

So far I have this :

Quote:

Hourly rate clients are invoiced on the 15th of the month and payment is due upon receipt. Retainer clients are required to pay in full in advance of services; payment is due on or before the 1st of each month. A 2% per month late penalty charge will apply to all delinquent accounts.

I am contemplating adding in something in regards to NSF charges too.

Tess · #3 (**permalink**) 12-10-2007

Now that's a definite must - if you're going to accept checks an NSF policy makes alot of sense!

vainparadise · #4 (**permalink**) 12-10-2007

I'd like to just accept paypal but I know that probably won't fly with all clients. I don't even know what a good NSF amount should be. Any ideas?

Tess · #5 (**permalink**) 12-10-2007

Actually, the only method of payment I accept is Paypal - I accepted checks from one client ages ago and it just took forever, I was always waiting for them to be cut by the bank and sent. Then I had to go to the bank or post them to my account....I also accepted direct deposit for a while at the start of my practice but that too started to get complicated and was messy. Paypal is quick and easy, everyone has a clear record of what's what and when it was requested.

But if you do decide to accept checks, be sure to add some kind of wording like:

"NSF policy: $XX or most allowed by law."

It doesn't have to be complicated, just clear.

Tess · #6 (**permalink**) 12-10-2007

I just found another sample NSF policy that has a bit more meat to it:

"Bad Checks are sent to the __________ Attorney's office.
Bad Check Policy
Checks marked "Returned for Insufficient Funds" are resubmitted once. Checks returned a second time are prepared in accordance with the _______ Attorney's office Bad Check handbook. The bad check is photocopied, a bad check letter is filled out and mailed to the client. Failure to pay the debt with cash, money order or certified check sends the client's check to the _____ Attorney's office.

Bad Check Charges:
Checks Up to $100 $20.00
$101 to $300 - $45.00
$300+ - $70.00

vainparadise · #7 (**permalink**) 12-10-2007

Great! Thanks! I need to really think about if I want to accept only paypal. I don't want to loose a potential client if I won't accept their checks.

Tess · #8 (**permalink**) 12-10-2007

I totally understand - like I said, I accepted checks for a while but it was just too much waiting. I've never once had a potential client or contracted client complain about or even comment on the fact that I only accept Paypal - it's just the way we do things and if the client needs help setting up their Paypal account I can do that for them too

#9 (**permalink**) 12-11-2007

All my clients use Paypal with payment up front. I do accept checks but will not process any work until they clear the bank so no one wants to go that route anymore.

equipbiz · #10 (**permalink**) 12-12-2007

We don't have a problem with late problems. All work is paid for up front (either before document delivery or mailouts are sent or a transcription is delivered). For retainers or regular work, we are paid a month in advance so we are always ahead and credit is carried into the next month if appropriate. In addition quite a few of our clients pay with PayPal too.