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Client in Portland pushed back on my 2 percent monthly late fee, now I can't tell if I was being greedy or just realistic
She told me $25 extra on a $1,200 invoice felt like a punishment, so I dropped it to a flat $50 after 30 days, but now I'm wondering if strict percentage fees actually get people to pay faster or just make them avoid hiring you again.
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danielk843d ago
Flat fees don't always teach people they can sit on your money for free, @max_schmidt77. If that fee is big enough it stings just as bad, maybe worse. My old landlord charged a flat $100 late fee and nobody I knew ever tested it twice. On a $1,200 invoice though, $50 is nothing, so yeah, that client will probably drag it out again. The real question isn't flat versus percent, it's whether the number is big enough to actually bug them. A 2 percent fee on small invoices barely adds up, so a flat fee can work fine, but you have to set it high enough to matter.
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max_schmidt773d ago
Been there with a web design client who swore the 2 percent was "predatory" and then STILL paid 3 weeks late. Flat fees honestly just teach people they can sit on your money for free.
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