Curious to know how you all handle late board/training payments. Boarding Contract as well as every cover letter of every invoice spells out the rules. Board/Training is due on the 1st and late after the 5th. Show payments are due 10 days from date of invoice. Hefty late fees. Does anyone have any magic to insure promptness?
We accept cash, check, credit card, ACH or Venmo so we’ve covered the convenience factor.
Generally, speaking as a landlord here, it’s easier to give a “discount” for payment by X day than to charge a late fee for payment after Y day.
Psychologically better for everyone.
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[some-time boarder here, not a barn owner] Are you emailing professional looking bills, or simply expecting people to remember to pay? (And then expecting them to do the math if they’re late?)
On the 25th I would be sending out statements showing what is due, US Mail if possible, though that starts costing money. I would not leave them at the barn, they’ll just get stuffed into a grooming tote and forgotten. At least an email with a structured subject that changes each month like "Barn Name Board Bill for Month, Year.
On the 6th, add the late charges and send out another bill. (Extra credit if you send a notification with a thank-you when it gets paid.)
From there you can use your judgement as to whether to start threatening with whatever the law is for your area as far as placing a lien on the animal and potentially selling it to recover costs. Even if you’re not actually going to DO it right then, a clear explanation of your next steps may get things in gear. But if they’re really not going to pay, getting the horse off your property is probably cheaper than going through the process, assuming you start soon and don’t let it go on for months.
Basically, it should be no different from getting your phone bill. Boring. You know it’s coming every month, you don’t have to think about it until the notice arrives, then you pay it.
Not sure what processor you’re using, but if you have the ability to tokenize the card or bank account info and do recurring payments at least for the basic board bill that would be great for you. (I personally wouldn’t hand over that info, but some people might!)
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Board/Training invoices go out on the 25th via email with a Quickbooks professional invoice. There is a link on the invoice so client can pay by ACH or credit card. Convenience fee if paid by credit card. Convenient payment box at the barn if client wishes to drop a check. Notice on invoice states that ACH (bank to bank transfer) is free but there is a 3-5 day delay.
On the 6th, the late fee is applied and invoice is resent.
I don’t do a “pay early” discount, because essentially I would need to raise board to discount “on time” payments which seems silly.
I like the ACH option because is so cheap and so convenient for the client, but I’m having an issue with clients waiting until after the payment is due (like the 5th) to initiate the payment, so we don’t receive until the 10th.
I’m considering changing my Boarding Contract to require a credit card on file to be used after the 5th.
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Sadly the people with the most money always seem to be the worst about paying on time. No idea why that is.
If you haven’t already, I’d make sure your contract has something in there that payment must be “received” by X date so as to not incur a late fee. Make sure you’re covered for those people who don’t initiate until the due date.
I would definitely require a credit card be on file.
As you’re a show barn, you may want to add a clause like the place I ride with has. I forget the number of days, but anyone with a balance due over “x” days is not allowed to show. For serious competitors that’s always a pretty good incentive.
My barn also does a $150 board discount if you pay by a certain date. It’s odd, but people are really better about paying if they “get a discount”. Must be something psychological.
Frankly, knowing who you are I doubt you’d have too much trouble filling stalls/lessons. If you have habitual late payers I’d start considering a “late more than X times a year and you can leave” type clause.
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Recurring payments are automatically billed at our barn for this reason. Board/monthly lesson tuition payments are automatically withdrawn. This has made life so much easier!
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Your customers don’t care about the ACH processing delay – once they initiate the payment, the money is gone from their account, so in their mind they HAVE paid on time. And if it’s clearly “not late until the 6th” then they are perfectly fine ‘paying’ on the 5th.
Is this the worst problem you have? Not that people aren’t paying at all, but that they are using ACH and it takes a few days to arrive? You may have to just accept that fact if you’re going to offer it as a payment method.
If they handed you a check on the 5th (still not late!) when do you get the money? How different is that from ACH? (And you have extra work to do, going to the bank or at least using your bank app to take a picture and do a deposit.)
Charging extra for the use of a credit card is also a potential problem. It’s just a cost of doing business, build it into your rate. And here is one place where you can offer a discount for cash/check/ACH. Seriously, more people will use a credit card if you say “this is the price” (and then offer a discount for cash) than if you have that fee. Also falls under the “don’t make people do math” rule, especially if it’s a percentage. :lol:
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I agree. If payment is due by the 5th and I pay on the 5th I’m not going to pay a late fee. I think you not getting the money until later is just part of the process.
I pay my Farrier via ACH. My SO pays via credit card and she charges an extra 2.5% to cover the fee. He doesn’t care.
Is this a widespread problem or just one problem boarder? That determines if you need new procedures or just reinforcement of existing procedures
My self board barn gets 6 months of post dated cheques. My condo landlord gets a year of post dated cheques. Works well when the cost is the same each month
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horsenut_8700: could you tell me more about the recurring payments? That would be a good solution…
For recurring payments I assume one would keep a credit card number on file that they automatically charge the board to on the 1st of the month.
I’m a small operation, but I find that really the main thing that helps keep people paying on time is actually enforcing the late fees as stated in your contract. Also, charging a daily late fee means the tab racks up the longer people go without paying. Having a “discounted” rate to pay on time, then a higher rate if paid by whatever date, isn’t as much of a deterrent as a daily penalty that adds up and up, IMO. I’ve know dozens of BOs who put late fees in their board contract, but don’t actually do anything when people pay late, then people just pay late all the time. Then when that boarder goes to a different barn, they pay the new BO late because they assume they won’t charge late fees either. If it’s in your contract, enforce it.
Now, I am personally willing to work with someone if they’re having a bad month or something, as long as they discuss it with me BEFORE the payment is due, and certainly BEFORE the payment is already late. But again, I’m small, I have a small number of people to need to work with should anyone need to. I would not be as flexible if I had a large show barn as it sounds like the OP does, simply because keeping track of so many nuances is tedious and tiresome.
I agree with some other posters that the processing period is not the problem of the person paying. The ACH processing period is the same as receiving a paper check. They take a few days to go through. If this is an issue for you, adjust your due date, or do not accept ACH payments.
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In 1991 my horse had her own credit card and her expenses were charged to it by the trainer …that was thirty years ago so I would think it would be easier to do today (horse would even buy her groom lunch once a week)
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I do billing, etc. for a local barn. They charge a 5% late fee to your balance. It helped the BO a lot. There would be 10-12 boarders still owing on the 25th of the month. Now it’s down to 2-3. Depending on what all is tacked onto your monthly board (hay, feed, etc.), 5% can be a good hit.
Since you mentioned Quickbooks I looked around to see if they have recurring billing. This is hilarious: https://quickbooks.intuit.com/learn-support/en-us/payments/how-can-my-customers-auto-pay-their-invoices-in-qb-online/00/222126#
tl;dr: no, not really.
The company I work for does subscription billing, but it’s primarily aimed at business-to-business software-as-a-service. I’ve always wanted someone to use it for a big boarding barn though! It has a customer facing portal where people can choose add-ons and update their credit card info. It’ll send an email three days before it’s going to charge. You can even have coupons!
This doesn’t exactly answer the question, but do you offer newer alternative payment options? Venmo/zelle/paypal? With these technologies, you can exchange money from anywhere in the world anytime you have your phone connected with a push of a button…for me, it means no more finding(forgetting) a checkbook, no more driving out to the barn just to drop off a check, no more finding a stamp to snail mail a check, no more memorizing CC numbers or pulling out my wallet, etc. etc.
I accidentally bounced a board check a few months ago because I used an old checkbook for a closed account without realizing it. It was SO convenient for everyone involved that as soon as BO/myself knew there was an issue, that I could zelle over the fee immediately using my phone while I was out hiking on vacation and then it was in the BO’s account immediately (after convincing/teaching her to set it up of course 
No hassle, no txn fees, everybody as happy as possible.
These new methods are convenient but also an expense to the barn owner. I’m the Treasurer for an organization that has put on a couple of events and Pay Pal takes 2.45%* of whatever we get in. This means that when we budget for an event we have to consider that lost revenue in our fee structure. I understand this is true with any of the payment services, including debit or credit cards. I understand why it is; I think customers generally don’t know this or if they know don’t understand the full consequences.
Late fees are a “spur” to get people to pay on time. In some places they are regulated (so be careful if you are in a “Nanny State”).
G.
*I believe this is our percentage. I’d have to pull up our contract to be sure but it’s close.
What’s going on with your ACH payments that the process takes that long? I’d look into that.
Could you just collect post dated checks or have everyone set up automatic transfer to your account for the basic monthly cost? Neither entail huge service charges. Then bill for extra charges, and add a late fee on this. Encourage people to use e-transfer into your bank account. You can manage this from your phone. You do need to click on the message to finish the transaction. But the service cost is low or nothing depending on your bank account plan.
Not who you were asking but, you can set up ACH transfers to happen, for example, the first of every month. That how my board payment is set up. On your bank’s website in the online banking features, under transfer there should be something that says “set up reoccurring transfer” or something like that.
ACH transfers can take as little as 24 hours so maybe the people doing it on the 5th think you have it on the 6th? Reoccurring payments are also something your clients have to set up.
Honestly with all your available payment options there is literally no reason for people to be late. You could make the late fee insanely high.
Auto charge recurring charges:. QB needs to be sales receipt instead of invoice. It’s goofy they did this… idk why it’s not an invoice.
https://quickbooks.intuit.com/ca/tutorials/automate-payments/
There are also 3rd party apps in the QB app store for subscription billing if the sales receipt is not a fit or your program.
It sounds like you are running a really great program with explicit directions and many options to make it really easy for your clients to pay you for your services.
Have you had a chance to find out why the late payments are happening? Forgetting, cash flow issue, ??
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