Late Fees

Discussion in 'Management' started by Michael Carter, Aug 22, 2017.

  1. Michael Carter

    Michael Carter Administrator

    When you open a self storage business, one of the decisions you need to make is how to handle your late fees. With the large number of tenants your facility will generate and the relatively small monthly expense, you are likely to run into several late payers.

    Every facility ends up with a tenants paying late at some stage, and if this grows, you may find yourself in a cash flow crunch. In order to prevent that from happening, it is important to be pro-actively collect from your tenants before they become delinquent clients.

    One effective method for giving your customers a reason to pay the bill is the use of a late fee. There is several different structures with respect to charging late fees to tenants.
    • A one time fee of between £5 to £20.
    • A daily fee of £1 a day until the balance is paid.
    • Set fees at 7 days, then another higher one at day 14.
    Many operators go with the first option, by charging a single late fee per billing cycle, after the grace period.

    The choice is entirely up to you, but it would be interesting in hearing how others deal with clients in this situation.
     

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