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Have you ever realized how much it can cost you just by not paying bills the right way? By understanding how to avoid certain bill paying mistakes, you can actually save yourself money when you pay a bill rather than waste it.
While I was in college, I worked with a particular company that I absolutely loved. It was a great job. I’ve always enjoyed working in an office environment and I worked with a wonderful group of people.
One of my job descriptions that was not so great, however, was having to call tenants when they didn’t get their rent in on time.
It is never easy to tell someone their rent is late and they’ve been charged a late fee and could face even worse consequences if they don’t pay soon.
But what I learned from that experience is that a lot of the reasons many of the people I called were behind in their rent wasn’t even necessarily because they couldn’t afford it. Rather, it was because they didn’t manage this particular bill (and possibly others) correctly.
Of course every company is different, so some of these characteristics won’t apply to every one, but I came to realize based on my experience at this particular company that there are 5 mistakes these tenants fell for. And these mistakes ended up costing them money when they could have saved it instead.
Are any of these familiar to you?
Bill Paying Mistake #1 The last day of the grace period is the bill’s due date
At the company I worked for, rent was due on the 1st of every month and clients had until the 10th to get their payment in before they were charged a late fee. This 10 day period is called a grace period and many companies offer this, sometimes with less days and sometimes with more.
I love that we offered it. We can all forget to pay a bill on the due date once in a while or get behind financially in a given month so this provides a little leeway to get it in. (Side note: At my current apartment, rent is due on the 1st and there is a $50 late fee if it gets in on the 2nd. Yeesh! Talk about no grace period at all.)
However, there was one glaring problem that many of our clients fell victim to: they used the 10th of the month as the due date instead of the 1st, the actual due date.
This caused a lot of trouble for many of them. You see, rent was due on the 1st and was actually considered late as of the 2nd. But what many of our clients believed was that their payment was not late until the 11th, the day after their grace period ended. In reality, at this point, their payment was 10 days late!
If you are offered a grace period, remember, your due date is still the first day of the grace period, not the last.
This brings me to mistake number 2:
Bill Paying Mistake #2 If the bill is paid one day past the end of the grace period then it’s only one day late
For many of those clients who looked at the end of the grace period as their payment due date, they could not understand how we could charge them a late fee when their payment was “only 1 day late.” They would beg and plead with us to waive their late fee and we had to convince them that we actually received their payment 10 days after its due date!
If any of your bills offer a grace period, remember that your payment is considered late if you wait until the end of the grace period to pay it (at least with many companies). To be safe, unless you are short on cash that month, do not wait until the end of your grace period to pay your bills. Pay them as soon as you can. That’s just good practice anyway 🙂
Bill Paying Mistake #3 If your bill payment is in the mail by the last day of the grace period then it’s not late
There are probably plenty of companies that will accept a payment as on-time and not charge a late fee, as long as the mailed envelope is postmarked by the end of the grace period. But please do not assume that every company is this way. In fact, if you tend to mail payments late, then ask the company how they treat the postmarked date just to be safe.
We would often receive payments from clients with a postmark date of the 10th, the last day of the 10 day grace period, and clients would assume they would not be charged a late fee.
Unfortunately, if there was still a balance on an account on the 11th, our system would automatically tack on the late fee. We could not stop that from happening. So by the time we received the payments in the mail a day or two later, the late fee was already there.
Some clients would also put their rent payment in our mailbox outside our front door on the 10th, but it was after close of business when we were gone for the day, so we would not get their payment until the 11th (or even later if it was the weekend). Unfortunately, because the payment was not in the office and posted to their account by the end of the business day on the 10th, they received a late fee.
If you like to mail payments, be sure to send them out well in advance of their due dates because you never know when they will actually arrive at their destinations. If it’s getting close to a due date and you haven’t yet paid a bill, check instead to see if you can make a payment by phone or online. Plus, you save yourself money by not wasting a stamp!
Bill Paying Mistake #4 If you get at least part of the bill payment in then it’s not late
As mentioned before, every company is different. Some are more lenient while others are rather strict. For many, a partial payment does not mean the bill has been paid.
Our clients would still receive a late fee on the 11th, even if the majority of their bill was paid on time.
Of course there were times when they may have been able to work something out ahead of time with a manager to make a partial payment, but don’t assume your partial payment will suffice without first talking to someone about it.
Your best best is always to get the entire payment in on time, if you are able.
Bill Paying Mistake #5 The company will know if you move even if you don’t tell them
We would sometimes have clients that would move and/or change their phone number without letting us know, and so their bills would get returned to us and we could not reach them to let them know. Unfortunately, this is not necessarily an excuse to not pay your bills.
To make it clear again, every company is different so some may be more lenient, but that can never be assumed. If you move or change your phone number, make sure to update your contact information with every company in which you pay a bill. And remember that mail forwarding has an expiration date.
Also, at my company, even if mail was returned to us with a forwarding address on it, we could not actually change the address on the account without having the new address in writing from the client.
It makes me sad to think that some of our customers ended up losing thousands of dollars simply because they forgot to provide us with their new contact information until well down the road. And yes, we did tell them they would need to do this when they first started using our services!
Bonus! Bill Paying Mistake #6 Not receiving a bill in the mail does not mean you don’t have to pay it
To piggyback on mistake #5, not receiving a bill in the mail is not an excuse to not pay it. Companies assume that you know when your bill is due and therefore it is still owed whether or not a bill is in hand. If you do not receive a bill, call the company or try and make an online payment.
So at this point you may be thinking that my company was not that nice and never gave clients a break. On the contrary, we often waived late fees for clients, especially if it was their first one. But we could only give someone so many breaks if they refused to follow our specific procedures. And some companies may not give any breaks at all.
Don’t be one of these people that ends up paying all of these extra fees that could have easily been avoided! Brushing off or not really listening to what a company tells you regarding their system and procedures can lead you into trouble. You may not think it’s fair or reasonable, but I would rather you not get into financial trouble because of it!
Save money by paying your bills on time every month. If it helps you, keep a spreadsheet so you know exactly what is due when and if it has been paid. Here is a tracker you can download for free to help you if you’d like.
Do you have any stories you can share when it comes to paying bills? Please comment below!
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