late fees
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- pr2
What's the general consensus on charging late fees to large business that constantly lag behind in paying invoices on time (sometimes as much as 45-50 days past the invoice date)? Is it OK if so how much?
- whereRI0
id like to know this too, im sick of chasing people for money
aaarg
- akrokdesign0
i have heard about 1 to 1.5%, but i think that way to low if you ask me.
i have written on the invoice, that's a charge a set fee $____ for late payments.
- if i miss a payment to credit card companies, they charge 30-50 bucks. so can i then.akrokdesign
- < lovely english here. lol.akrokdesign
- hey, i have a cold. ok.akrokdesign
- I concur on the comment about credit card companies... Great analogy...ideaist
- ideaist0
From experience, I believe the best rule of thumb here is to nag, nag (and nag some more) in person and on the phone; no emailing once the date on the invoice has been passed; you gave them a chance to deal with things in only ASCII characters but they went and fucked you so now it's game time because you've got mouths to feed and bills to pay.
On your initial contract, include some type of flat (or %) fee that is added if not paid (in full) on time; most clients will understand this is simply a precaution.
Lately, I've been given the idea of clients getting some type of small discount (2,3, even 5%) if they pay on time and/or ahead of time. Any thoughts on this type of reward system? A little initiative never hurt anyone?!
- bzsaw0
Legally it depends from State to State.
- beautiful0
from my experience the bigger the corporation and the larger the invoice the longer it´ll take them to pay up. if you plan to ´educate´ them with the late fee, i´d forget about that, not possible. better to incorporate the late fee in the cost estimate, mark up, and/or ask for respective interim payment(s), adapted timewise to slow accounting.
- totally agree; using payments with milestones is a good practice.zarkonite
- Knuckleberry0
I have 3% written into my contracts.
Its not a lot but can be annoying for the client, which is why I like it.
- zarkonite0
my late rate is 18% annual (basically a copy/paste of a credit card)... however I don't think I've ever charged anyone for being late, it's just there to motivate them to not even try.
For those who do, you can choose to tighten the screw and lose the business or you can play nice and nag over the phone and stuff.
Just remember business is about relationship and reputation.
- BH260
I have a lot of overhead covered on my jobs so if the client usually takes 3 months to pay. I write in a clause mentioning if they pay within 2 weeks I take 2-4 percent off total. which saves the credit card interest and I can pay my service providers faster too. everybody wins- well except Mr.ViSA
- fooler20
most big companies have at least a 60 day payment term, bill early and often!
- vaxorcist0
slashing a few tires may be the best option.....
- must_dash0
i finding sending an email at the same time every week does the trick... especially mid morning on a monday, as they come to expect it and pay you to make it stop :D
- inkpink0
i've asked qbn before and basically told to suck it up and quit whining.
- Amicus0
Add 10% to your initial estimate and take that off if they pay early. Always send a friendly reminder via email and snail mail on the 30 day mark. Add 10% if it takes more than 60 days to pay.
Either way you are covered.
- boobs0
I'm thinking of a new policy of not launching the site until I'm paid in full.
- if it's your client. then hell yeah. the stuff has to be paid in full before handing over the site. other wise...akrokdesign
- they run over you.akrokdesign
- lukus_W0
Get them to pay in stages .. 40% at start 40% at an agreed milestone - then 20% at sign off.
That way, worst case scenario - you are only waiting for 20%.
- SoulFly0
10% fee after 3 months late.
This serves just as a warning/ reminder.