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)?

__________________
Stuck in startup? Stop dreaming. Start DOING!
Get the Become a Virtual Assistant eBook for just $29

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.

__________________
Dawn Riley
A Virtual Assistant in Paradise
Our business is about making yours better

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

__________________
Stuck in startup? Stop dreaming. Start DOING!
Get the Become a Virtual Assistant eBook for just $29

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?

__________________
Dawn Riley
A Virtual Assistant in Paradise
Our business is about making yours better

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.

__________________
Stuck in startup? Stop dreaming. Start DOING!
Get the Become a Virtual Assistant eBook for just $29

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

__________________
Stuck in startup? Stop dreaming. Start DOING!
Get the Become a Virtual Assistant eBook for just $29

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.

__________________
Dawn Riley
A Virtual Assistant in Paradise
Our business is about making yours better

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

__________________
Stuck in startup? Stop dreaming. Start DOING!
Get the Become a Virtual Assistant eBook for just $29

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.

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.

My contract states there is either a 23% APR or $10.00 late fee, whichever is greater. QuickBooks figures this automatically for me based on the due date. I've only had to charge a late fee once. I charge a $40.00 NSF Fee, plus applicable late fees, but have never had to use it. My contract also states that work does not begin until checks have cleared.

My contract is pretty strict on terms. I am more leniant with my clients, but the terms are there in case I feel the need to enforce them. I've been lucky so far.

__________________
Rebecka Melson ~ Virtual Business Services

I too have a strict policy just in case.

Wow this is a very interesting thread. I know I am getting in late on the conversation, however let me tell you how I handle this. I stick with the insane to keep them from getting insane. I charge a 10% late fee for any invoice that is unpaid for 30 days. My contract also includes a Bad Check Policy too. You only get to have two of those in any given year, and you are billed for whatever the current rate the banks charge for returned checks as well as an addition fee of 10% for the inconvenience.

I have to say, this has helped as always the checks are good. So far anyway. LOL

Hi everyone,

I work only with retainer clients and sometimes they forget to pay, so I do this by client and how often they forget. lol! I belive in the 3 strikes your out and in my agreement I state that the invoice is due by the 10th and a late fee of $35.00 imposed if not received by the 11th. If I do not hear from them then I stop working on their tasks by the 15th.

If the are constantly late I cut them loose, professionally! I do not want to waste my valuabe time on those that are not appreciative of my services and do not meet my standards.

When I first started out (2000) I had no idea what I was doing. I had a client run up an invoice to $2,500.00. Finally hubby stepped in and helped me put my policies in place. LOL! I did get payment, but was so embarassed that I let this happen, so now my business agreement is very clear.

Kim

I invoice the 15th and the 30th of the month and payment is due in 7 days. International clients pay via PayPal but my Aussie clients mostly pay via direct deposit. My hosting clients pay via PayPal or Credit Card because payment is due at the time of the order.

I don't charge an overdue fee because I've not had anyone pay me late. I also send out statements every 2 weeks.

Clients sign to these policies when they sign my agreement.

__________________
Kylie Short
Tilda Virtual Services - Making virtual personal