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late fees - Contract engineer

late fees - Contract engineer

late fees - Contract engineer

(OP)
Curious what ya'll think.
What is an appropriate late fee?
I just spent the last 2 months working for a small product design firm. I'm a mechanical engineer on a 1099 contract.
In his terms that we signed, payment is due 'net 30'.
Well, it's been 31 days. I stopped working there last week. It's about an hour drive each way to confront directly.
I feel like payment should've been in my hand within 30 days according to his own terms. Not the check is in the mail.
So what's an appropriate late fee?

RE: late fees - Contract engineer

Just worry about getting paid. A nice phone call might do the job. Talk about a late fee will only mean you will be paid later.

RE: late fees - Contract engineer

I agree with hokie66...the late fee would be small, and once your client knows you're willing to accept payment, but late...he'll make it late.

If you are working on a contract basis, no benefits, no leverage....then re-negotiate your contract to better terms...say, net 10 days.

On the day after your payment is due, start calling their accounts payable person (get to know this person...valuable). Find out when the invoice will be processed and when the check will be available. Do it every day if necessary.

RE: late fees - Contract engineer

Phone call - make it nice !!

Execute a new contract outlining "late" payments. You probably won't get them - but does give you some leverage. Just be happy if you get paid!!

RE: late fees - Contract engineer

Or better yet, give a discount (not really a discount), if you're paid early (not really early).

RE: late fees - Contract engineer

Just make sure to mark up the fees you actually think it will take for you to do the project in your contract by 10% if include a 10% discount for payment within 10 days of billing.

Whst they don't know won't kill them.

Mike McCann
MMC Engineering
http://mmcengineering.tripod.com

RE: late fees - Contract engineer

Unless you don't like the client at all make sure you are nice to them. I usually send my invoices by email. After 30 days I then forward the same email I sent 30 days before and ask them if they received the email. If I hear nothing I then make sure I get in contact with them and ask them if they have received the email and then ask if there are any issues with the invoice. Then I follow up every once in a while to see what is going on. In my area of expertise as time goes on I will then begin to crank up the heat by saying "I like working with you but you are putting me in a tough position". Then after a great while I contact a lawyer about placing a mechanics lien on the project. Doing this will probably end all relationship with the client.......

I have never really made it through to the last part but I am prepared if case I do. I find it funny that clients do this. They are only hurting themselves. If I can't pay my insurance premium because they didn't make their payments on time who's at fault?

I usually don't get to worked up at 30 days. I have one client who refuses to pay in 30 days.... but as soon as you contact them at 31 days your check arrives a few days later. Just what they do and I am always prepared for it.

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