Late fees

[JJStephens]

My tax practice is predominantly clergy but I do have a smattering of others including a handful of small business types. For 28 years I've operated on a trust basis. I give my clients an invoice and they almost always pay within a reasonable time. Almost always.

I know most of you expect your fee COD but for those who do accept deferred payments, do you assess a late fee? If so, how much? I'm contemplating 1.5% per month with a $5 minimum after 60 days (that gives them more than adequate time to get any refund they might have coming).

[Catherine]

I hit folks with a late fee if they are chronically late.  Yes, 1.5%/month.  Basically once I start getting annoyed at repeated promises of payment without payment showing up.

[Tax Prep by Deb]

2% plus $25.00  clearly stated on my invoice.  I usually assess it after 2 calls followed by two invoice reminders.

I really have no intent on collecting it but it usually gets their attention. 

[rfassett]

1.5% after 30 days.  Invoices are due on presentation - making them past due the next day.  I will give those few to whom I extend credit 30 days to pay - then I assess the late fee and fully intend to collect it.  I am neither a bank nor a credit card company.  My fees are due upon presentation.  Now, all of that said, your state law will have a lot to say about what you can charge and when.

Oh - and by the way, I consider invoice presentation at the moment that they are called to come get their return - not when they decide to come and pick it up.

[ILLMAS]

I had a client bounce two checks, I am going to play it nice, but as soon as I collect my fee, good bye.

[jklcpa]

I have the same policy and rate as rfassett.

[michaelmars]

$25 plus 1.5% interest.  Your invoice must state this in order to collect [in NY].  Usually when I send the late fee I always get a check dated 2-3 days before that for the initial amount.  I am ok with that, I provide personal service, and like my clients or I don't keep them.  the late fee is just a kick in the butt to get me my money.  If the client pays it, I keep it of course, but I never really expect to collect it.

[Possi]

Simplify your lives! I hold a check until they call. Or I hold CC information, buried in the software so no one would know what it is, but me. But never let them walk out without paying or arranging payment. I keep a simple list of these clients and if I have to call anyone, they don't walk out the next year without paying.

I bet last year I called 3 people out of 517.

THREE.

Would you leave the grocery store with your groceries without paying?

[jklcpa]

42 minutes ago, Possi said:

Simplify your lives! I hold a check until they call. Or I hold CC information, buried in the software so no one would know what it is, but me. But never let them walk out without paying or arranging payment. I keep a simple list of these clients and if I have to call anyone, they don't walk out the next year without paying.

I bet last year I called 3 people out of 517.

THREE.

Would you leave the grocery store with your groceries without paying?

 

Mostly good ideas except for keeping the credit card information. I don't know who your processor is, but that would be a violation of the terms of agreement and security/privacy policies with mine, no matter how well hidden the information is. I'm not allowed to store that complete information, only the last few digits.

[michaelmars]

YOU CAN store it , there is a paper they have to sign, we have many clients that pay monthly retainers via credit cards we keep on file

 

 

[jklcpa]

15 minutes ago, michaelmars said:

YOU CAN store it , there is a paper they have to sign, we have many clients that pay monthly retainers via credit cards we keep on file

 

 

 

I wasn't aware of that, obviously.  Thanks.   

[michaelmars]

I will try and remember to have my office manager get me a copy for you on Monday.  if I forget, feel free to remind me. 

[Possi]

On ‎2‎/‎26‎/‎2016 at 0:39 PM, jklcpa said:

 

Mostly good ideas except for keeping the credit card information. I don't know who your processor is, but that would be a violation of the terms of agreement and security/privacy policies with mine, no matter how well hidden the information is. I'm not allowed to store that complete information, only the last few digits.

Nope, not at all. It is chopped up and hidden cryptically within the tax software where no one could ever figure it out! I never, ever keep cc information, not like you are thinking. Sorry, I should have clarified that. edit: I hope I was really clear on that. I keep a few numbers here, a few numbers there, and it's very cryptic. I take security very seriously. These numbers are not kept in one place, they are never written down, and there is never a complete CC number ever in one spot.

Edited March 3, 2016 by Possi
clarification