Just a quick note for those of you charging a % for late fees. You have to be really careful what you charge because if you go over the legal limit for the state in which you are doing business the amount could be considered usury and will be disallowed should it ever go to court.

I've seen a couple people mention 10%/month. That is WAY over the limit. Most states cap it around 20+%/year. In this case, you need to either:

1 - change it to a flat fee that you're charging (not a %)
2 - say you'll charge XX% for the first 2 months then send to collections
3 - stay within the legal limits by changing it to: late accounts will accumulate interest at a rate of 24%/year or 2%/month.
4 - combine a late fee with an interest rate. i.e. $35 late fee + 2% interest.

Just something to think about because it could potentially cause problems with your contract.

Great info! thanks!

Good to know. I was wondering what I was going to charge percentage wise but now I know to charge a flat fee plus 2% per month.

Originally Posted by VagabondetteVA

Just a quick note for those of you charging a % for late fees. You have to be really careful what you charge because if you go over the legal limit for the state in which you are doing business the amount could be considered usury and will be disallowed should it ever go to court. I've seen a couple people mention 10%/month. That is WAY over the limit. Most states cap it around 20+%/year. In this case, you need to either: 1 - change it to a flat fee that you're charging (not a %) 2 - say you'll charge XX% for the first 2 months then send to collections 3 - stay within the legal limits by changing it to: late accounts will accumulate interest at a rate of 24%/year or 2%/month. 4 - combine a late fee with an interest rate. i.e. $35 late fee + 2% interest. Just something to think about because it could potentially cause problems with your contract.

I have noticed that in my paid job, when looking at invoices, some companies do incur a 2% late payment fee if you don't pay in the terms stated... unfortunately where I work it's not like that (although we have to pay a few suppliers by the end of each calender month). When you pay the bills you need to ensure that you pay your suppliers on time... also looking at any general company and their terms would be useful.. L.P.Charges would be the same whatever industry you work in, i think

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Julia Neal ...because we ♥ admin!
http://julianeal.wordpress.com

Here is a paragrah from my service agreement and terms of service:

• 2% late fee of any unpaid balance;
• Payment is due upon receipt of an invoice. In most cases it the 15th and 30th of every month after the first two weeks – first two weeks you will receive an invoice on Friday, payment due by Monday.



PAYMENT TERMS
Client will receive an invoice for services rendered and an expense report (if applies) at the time of completion of services. Client hereby agrees to pay the invoice in full at the time of delivery. HAT"S Virtual Assistant Paralegal/Secretarial Services reserve the right not to release any final projects until full payment has been received. All projects and/or assignments are due upon receipt of an invoice unless you are placed on COD for billing issues.

ENTIRE AGREEMENT
This agreement and HAT Virtual Assistant Paralegal/ Secretarial Services Terms and Conditions of Service contain the entire understand of all parties. The Service Terms and Conditions of Service are hereby restated and in full force and effect in this document.


If someone would to see my entire welcome pak let me know. However I must tell you that I have 3 clients and 2 of which are 45 days past due I broke my own rules by giving them the work FIRST!! How stupid was that !!

Heres the thing, I am in the middle of this as we speak with a referral from a client (and I trusted their ethics so no deposit-now no pay) and my questions is if they won't pay there invoice how in the world I am going to get them to pay a late fee? I think I am just going to write this on off as a loss and a lesson learned. Experience is the best teacher. I normally don't have a problem because require a deposit up front and at completion so I didn't have a late policy in place. Thanks for the help here, I need to revamp somethings!

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Mary Harris

My ideal client is a retainer client which means that they make payment the 1st of the month BEFORE I do any work for them, no payment, no work..they are getting a discount off regular rates and no late policy needed...if I do occasionally work on a pay as you go basis I require a deposit up front then I work it out and as that is depleted I bill at bi-weekly intervals at the regular rate with a late fee of 3% being incurred 30 days after invoicing.

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Cheryl Richey
Carte Blanche Assistance, LLC
Virtual Assistance...Creating Time for You!

Originally Posted by teel03

If someone would to see my entire welcome pak let me know.

Hi Teel!

Thanks so much for the information! I have been a VA doing contract work for just one business for the past 1-1/2 but am working on my website so that I can progress my business. I would LOVE to take a look at your welcome pak and anyone else who would love to give me any pointers or send me anything to be able to feast my eyes on! I want to make sure I have everything in place before I go live. Website work is NOT my fortae and you will not be seeing it in the services I offer LOL so I only want to have to work with my website just a minimal amount before I put it live ;-)

Thanks everyone! These threads are most helpful.

Kathy

Sorry Everyone :-(

Guess I just broke a rule by posting my email in my previous post. I guess I either forgot that I couldn't do that or obviously did not read the TOS that closely. I am thinking I just forgot as I did read the TOS but that was when I first signed on.

Anyway, I am apologize - I did see others with their websites listed and because mine was not up and running yet I thought the best way for contact was my email :-(

If anyone has any way of posting links or whatever is allowed so that I can see what some of you have out there to give me some ideas it sure would be appreciated. I can't give you my contact info but I guess if you have enough posts you can contact me through PM??

Any help would be appreciated.

Thanks!

Kathy

Hi everyone,

I too have late payment terms, NSF penalties ($40) as this is what the banks charge + $5 for inconvenience in my contract.

I also have added that "all payments received are considered fully earned and non refundable". This is in the contract for both one-off projects and retainer clients so this should cover for those circumstances with PayPal if the client decided to reverse a payment.

Thanks for all the info on this thread, it is great. I didn't even know that you could reverse a payment in PayPal. But at least I am covered in my SA.

Deb
www.opas.com.au

I also have a NSF check policy and last fee if invoice is not paid within 10 days (I do let my non-profit client slide a little on this one). As for retainer clients I send an "estimate reminder" if I don't receive payment at the beginning of month.

Lee

Originally Posted by Vicky

I was reading on another topic and I come across this link and I thought it may be of interest. It just shows how careful you have to be in keeping copies of sent emails containing completed work. Regards, Vicky

WHOA! *note to self* keep copies of signed work agreements and completed work showing client signature.

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Margaret Salmond, Bay Area VA
http://www.bayareava.info

Thank you. This really answers my question.

I just wanted to add something quick on the NSF charges. My sister and I were talking this morning and she has a terrible customer who NEVER has the funds in his account. I have 13+ years in Banking so I told her that since this guy is local she can go directly to his bank and (depending how the check is made out) she can ask them to turn the check into a Cashiers check, made out the exact same way. This can save you the headache of waiting until the customers check clears, or in her case does not clear. Some banks will require that you show your business identity and prove that you are the business owner. That is if the check is made to the business name.

It gets a little harder when the client is out of state....or is not using a chain bank...

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Kristina ~Success Office Solutions
Our Solutions Equal Your Success!

Great information! I am just starting my business and one of the questions I had was should I get payment up front before delivering work done or should I wait until the client reviews the work? Getting payment up front before delivery makes a lot more business sense to me.

Thank you everyone!

Thanks, i have been accepting checks and now I am re-thinking that! I was curious about fees with Paypal, or if you really need a certain volume to be worth it?

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Lara
Prairie Dog Communications Virtual Assistance LLC