When is your due date?

What date do your customers think is your due date?

If the answer to these two questions isn’t the same, you have a problem.

Conflicting due dates

In a sales presentation with a prospect last week, I asked, “when is your due date?” The two billing clerks contradicted each other – one stating their due date is the tenth of the month, the other insisting it is the first of the month.

The reason the second billing clerk insisted it is the first is because this is the due date printed on the bills. However, they don’t consider the bills to be late until the tenth, which explains the first clerk’s answer.

I can assure you, if you publish one due date but don’t charge a late fee until a later date, your customers will quickly catch on and, in their minds, they consider the “due date” to be the later date. Sure, your very best customers will pay their bills by the published due date, but as far as all the rest are concerned, the due date is the very last day they can pay without being penalized.

Grace periods

What purpose is served by offering a grace period between the due date and delinquent date? Absolutely none. Once your customers realize you won’t charge a late fee until the second date, you might as well publish the delinquent date as your due date.

If you offer a grace period, abolishing it is one of the easiest ways to reduce your days of exposure.


This same prospect, in addition to offering a grace period of 10 days, doesn’t charge penalty until two days after the delinquent date. They do this to allow payments postmarked by the tenth to be processed without being charged a late fee.

Verifying postmarks, or delaying charging late fees to accommodate them, is an antiquated process that few utilities take the time to do. Unless you are governed by state law or local ordinance that requires you to check postmarks, there is no reason to do so.

Mailing a check is no longer the only way to pay a utility bill. With options such as bank drafts,  online bill pay and IVR phone payments, your customers have no excuse for not paying by the due date.