RAINMAKER NETWORKS LATE FEE POLICY
Every invoice has a clearly stated due
date. That due date is the date by which we expect to have payment
in hand. It does not mean the date by which you as the approving
manager should pass it to your internal AP department. If your AP
department takes five days to get a check to us, then you as the
approving manager should plan accordingly.
Historically,
most customers have diligently paid invoices by the
due date. We greatly appreciate this effort that most
of our customers have shown and continue to show.
We handle late invoices with two approaches:
1) Grace Policy: Very simple, and it's free: COMMUNICATE .
If you can't pay your invoice on time, let us know BEFORE the due
date. We generally will work with you. This is stated on every
invoice after 11dec2022. More detail on this below.
2) Late Fee & Finance Policy: If you choose to NOT communicate
before the DUE DATE, then by default you are choosing and agreeing
to LATE FEES.
Why charge late fees?
Because late payments costs us actual cash money in two ways:
a) Money has a time value to it. A dollar today is worth more than
a dollar in two months. If we knew you were going to delay payment
by two months, intentional or not, we would have had to charge
more accordingly to account for that.
b) It takes a great deal of time to chase down the people who have
neither paid their invoices nor communicated accordingly.
The Grace Policy and the Late Fee Policy are described in detail
below.
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1) GRACE POLICY
Businesses occasionally have intermittent cash flow issues, which
we understand completely. We often extend an amount of grace
during those times, on a case by case basis, to customers who
otherwise have demonstrated prompt payment. We have generally
found this to be a sound policy, as the majority of customers are
good upstanding folk who quickly justify their accounts as soon as
their own business cash flow returns to normal.
If
your business enters this situation,all we ask is that you CONTACT
US PROMPTLY so that we can work out an understanding. While we are
willing to work with normally promptly-paying customers during
difficult periods, YOU MUST KEEP US VERY CURRENT on the issues
BEFORE THE LATE FEES COMPILE. To describe it differently, we
are willing to exhibit grace when we can, but don't take grace
from us without our knowledge.
There are no specific governing rules for how we apply the grace
policy. It is purely discretion-driven on a case-by-case basis,
mostly based on what kind of trust relationship we have built
between us. By necessity, we must reserve sole right of that
discretion. We apply it fairly and evenly based on our
relationship with you, not our relationship with people who are
not you. This idea of grace harkens back to the days of yore, when
business relationships were handshake-driven. It is a better way
for well-intended people to do business, no matter what the
lawyers say.
Having described that, here are two notables:
Habitually failing to account for the fact that your AP department
needs time to process your approved invoice does not earn grace.
Habitually being disorganized in task management does not earn
grace either.
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2) LATE FEE / FINANCE CHARGE POLICY
The alternative to the Grace Policy is choosing to pay late fees
per this formula:
On the day after the due date, Late Fees will be applied to your
account.
The
amount will be $10 or 1% of the original late invoice, whichever
is greater.
That same amount will be added again repeatedly in 1-week
intervals until the invoice is satisfied.
All of the above notwithstanding, we understand that occasionally
checks get lost in the mail or due dates are recorded wrong in
your calendar of bills to pay. We of course consider these
mechanical "misses", and we will zero out late fees in these
circumstances. However, statistically, nobody's check gets lost in
the mail 75% of the time. Nobody enters the date wrong in
Quickbooks 12 times in a row.
It's all about trust. Please work with us to keep it healthy so
that we are in position to continue to provide you with great
service.
Ed Goodwin
