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Roger, Attorney
Category: Business Law
Satisfied Customers: 31729
Experience:  BV Rated by Martindale-Hubbell; SuperLawyer rating by Thompson-Reuters
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I am trying to collect on overdue AR. Unfortunately, the CEO

Customer Question

Hi, I am trying to collect on overdue AR. Unfortunately, the CEO of the company I work for is a bit like Dr. Quinn when it came to invoices; and isn't willing to do anything that may upset the clients. I do agree; but we do need the services to be paid for as it's putting the company into a serious hole. I am wanting to take on a late fee for each overdue invoice; but I want to remain compliant with CA business law. Any suggestions as to how I can successfully collect the overdue AR?
Submitted: 1 year ago.
Category: Business Law
Expert:  Roger replied 1 year ago.

Hi - my name is ***** ***** I'll be glad to assist.

California courts have consistently upheld service charges, also known as delinquency charges, late fees, and finance charges, provisions as high as 18% per annum (or 1.5% per month) when the creditor could show that non-payment by the customer created administrative costs for the creditor.

Thus, you should be able to add a provision on your invoices that says all unpaid amounts after 30 days are subject to a service charge of ____%. That will give you the ability to charge the fee.

As for collecting, if your boss won't turn accounts over to a collection agency or to a lawyer to sue, you're really out of options except to wait and see if the customers will pay.