Charging penatly for late payments

[paulney]

A lot of companies charge your fees for paying the bills late. Be it a medical office, or phone company, or a credit card. Usually you don't see an agreement saying: 'if you don't pay your bill within X days we will charge you Y dollars'. Most of the time the company simply slaps on the charge in addition to the amount owed.

Now, I would imagine that if I, as a contractor, perform some work, and the customer does not pay on time, I can't just add any arbitrary amount, right? The customer will simply refuse to pay any penalty charges, because it was not in the original agreement.

How do big companies get away with it? And how can I make the penalty charge stand if the customer decides to dispute it? Should I include this as part of the customer's authorization to perform the work?

Thanks.

 

[Newbian]

Actually most of these places has something you signed that said you will pay this.

Without agreeing to it you can't just add a fee.

 

[Ns1]

Originally posted by: paulney
Usually you don't see an agreement...

Usually you do...

 

[SlitheryDee]

Put it in their contract.

 

[Red Squirrel]

Big companies also usually have more legal power. That's how they get away with it.

Though there probably is some fine print somewhere about it too.

 

[paulney]

Originally posted by: Ns1

Originally posted by: paulney
Usually you don't see an agreement...

Usually you do...

I usually read customer agreements carefully, but it's only the credit companies that explicitly say what the late charges will be. Medical offices simply say: you agree to pay for all the medical costs incurred while treating you. Then you get the bill, and it has a footnote: bills over 90 days will incur a 5% late fee or smth like that. Now, I did not sign up for the late fee!

 

[Savij]

Originally posted by: paulney

Originally posted by: Ns1

Originally posted by: paulney
Usually you don't see an agreement...

Usually you do...

I usually read customer agreements carefully, but it's only the credit companies that explicitly say what the late charges will be. Medical offices simply say: you agree to pay for all the medical costs incurred while treating you. Then you get the bill, and it has a footnote: bills over 90 days will incur a 5% late fee or smth like that. Now, I did not sign up for the late fee!

They didn't sign up to be paid late.

 

[GeekDrew]

I've seen many contracts (utilities, etc) that say that failure to pay your bill in full, on or before the due date, is either breach of contract, or constitutes harm to the provider. Ever noticed how some late fees actually say in the fine print something along the lines of "this late fee is liquidated damages, and is not a penalty"?

 

[spidey07]

It's in the contract or the purchase order/invoice/quote or service order agreement. It's in there. They don't just make it up be it business invoicing/payment or your CC bill.

 

[spidey07]

Originally posted by: paulney

Originally posted by: Ns1

Originally posted by: paulney
Usually you don't see an agreement...

Usually you do...

I usually read customer agreements carefully, but it's only the credit companies that explicitly say what the late charges will be. Medical offices simply say: you agree to pay for all the medical costs incurred while treating you. Then you get the bill, and it has a footnote: bills over 90 days will incur a 5% late fee or smth like that. Now, I did not sign up for the late fee!

And being late is part of all medical costs incurred. You being late is costing them money. It's considered a cost of doing business. You can fight the invoice if you like but be prepared for even more penalties.

 

[paulney]

Originally posted by: spidey07

Originally posted by: paulney

Originally posted by: Ns1

Originally posted by: paulney
Usually you don't see an agreement...

Usually you do...

I usually read customer agreements carefully, but it's only the credit companies that explicitly say what the late charges will be. Medical offices simply say: you agree to pay for all the medical costs incurred while treating you. Then you get the bill, and it has a footnote: bills over 90 days will incur a 5% late fee or smth like that. Now, I did not sign up for the late fee!

And being late is part of all medical costs incurred. You being late is costing them money. It's considered a cost of doing business. You can fight the invoice if you like but be prepared for even more penalties.

I think you are misreading my intentions. I, actually, want to enforce the same policies on my contract. The only way I see to do it, is to put it in the work authorization form that the customers sign. I asked about big business practices, because I do not see the clear wording like I would expect when I sign up for certain service with them.

 

[spidey07]

Originally posted by: paulney

I think you are misreading my intentions. I, actually, want to enforce the same policies on my contract. The only way I see to do it, is to put it in the work authorization form that the customers sign. I asked about big business practices, because I do not see the clear wording like I would expect when I sign up for certain service with them.

Just put it on the invoice then. Or have payment terms specified in the work agreement. Most times this is specified in a "service order agreement" or "master services agreement" - all the terms and conditions are covered in that and your work authorization falls under those T&Cs.