Late payment fee - to charge or not to charge?
Thread poster: EngRusTranslations -
I need your advice and thank you in advance for one.
We have a very good client that is fun to work with, he usually pays on time, no problems; we have been working with the Client for a long time, etc. etc.
Last payment got to us 10 days late (we usually allow 10-15 days for mailing). But not only it was late, the Payee stated on the check was wrong (absolutely different company/name), and the check was not signed - therefore, of course, we can't deposit it. BUT – OUR invoice was included in the envelope and the amount on the check was correct.
So, everybody suffers - the translators, the editors, the illustrators, etc. We all make living and we depend on our work payoffs.
Now, since I brought this matter to the Client’s attention, he wants us to send the check back (he is in another country, mail takes about 10 days one way), so, logically, it will take 10 days + 10 days = 20 days to receive another check. Plus couple of days for this and that.
The thing is that I personally do not want to offend him somehow by charging late fees and/or returned check fees. But this is a major set back (the amount due is pretty big).
What to do – should we charge late payment or returned check fee, or not?
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| | Susana Galilea
Local time: 19:14
English to Spanish
| I would charge for returned check fees only || Aug 24, 2006 |
There is no right or wrong answer to your question, however this being an established client (one you enjoy working with) and this being the first time there has been a payment glitch, I would waive late-payment fees as a good will gesture. However, I would mention to them just that, i.e. that I am making an exception to my late-payment policies as a courtesy, in consideration of their sound payment record.
On the other hand, I would definitely charge for the bank fees related to returned checks, as it is the client's oversight that caused these charges. No need to explain or justify, I would simply add those charges to my original invoice.
It is unfortunate that the amount in question is substantial and is likely to cause hardship on your end. I might reassess my position depending on exactly how much hardship this is causing...
P.S. Also, instead of having to return the check to him and wait for the mail, why not suggest he order a stop payment on the check and send you a new one right away. That may reduce somewhat the delay in getting paid.
[Edited at 2006-08-24 22:18]
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| A different solution possible? || Aug 24, 2006 |
Have you talked to the client, if there was a different solution to get the money to you faster at his expense.
As it sounds, it was completely his fault and so why not ask him what he is going to do about this, what he can offer you.
If this is a nice and friendly client he should feel uneasy about such a mistake and do something about it to recompensate.
If he does not, then maybe you should consider different payment conditions for the future, like partial payment in advance or part of the payment in between, so you do not have to suffer, when the final rate is a little late.
And why do you have to wait for the next check until he has this one back? He can send the new one right away so you only have to wait 10 + and not 20 + days. Make your client understand, that you simply cannot afford to wait that long. Of course you help by sending the check back. You can fax a copy in advance if he does not believe you. But he should send the new one at once.
| Punish a good, long-standing client for an administrative error? || Aug 25, 2006 |
No, I would never do that, Natalia. What about your future relationship with the client?
As Claudia suggests, it is up to him to think of making amends - but I think it might be better if you give him the freedom to do so, rather than immediately impose a punishment. I know it is all very frustrating waiting for money - but genuine mistakes do happen, and they are part of life and business. Your business needs to be able to afford to handle them.
In my opinion, meting out punishments, e.g. late payment fines, is something to be done with clients who deliberately pay late or attempt not to pay at all, in other words ones that you do not want to work with again either.
As Claudia rightly says, he ought to put a correct check to you in the post immediately, however, and not wait for the old one to arrive back.
I wish you all the best in your continued good relationship with this client.
[Edited at 2006-08-25 12:41]
| Thanks, everybody! || Aug 25, 2006 |
Thank you for your advice! I will keep that in mind.