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I finally learned to add a late fee after a $200 lesson
Honestly, I had this client in Austin who took 45 days to pay a $1,200 invoice. I spent $200 extra on interest and stress because I didn't have a late fee in my contract. Now I put a 5% monthly late charge on every bill and it's cut slow payers by half. Has anyone else had luck with a specific penalty that actually works?
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henry1504d ago
Hang on, but isn't a late fee just punishing people who are already having a rough time? I get that you lost $200, but if a client is 45 days late, they're probably struggling with cash flow, not just being lazy. Adding a 5% monthly charge on top of that feels like kicking someone when they're down. Plus, have you thought about the clients who are always on time? If you tack on a penalty, they might think you're the kind of person who nickel-and-dimes everything and take their business elsewhere. I've seen plenty of small businesses lose clients over stuff like this because it feels aggressive and transactional instead of building a relationship. Sometimes the best way to get paid is to offer a small discount for early payment, not a stick for being late.
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smith.lee4d ago
My buddy runs a lawn care company and he tried that whole "killing them with kindness" discount thing, and people just took advantage of it... still paid late but with a 2% discount tacked on. Feels like that $200 lesson is pretty serious if you're trying to keep the lights on.
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