Just ran the numbers on late fees and holy cow I've been losing money

I did the math on my invoices from last year in Phoenix and realized I let almost $4,800 slide by not charging late fees until 60 days overdue. Read a post on a small business forum where a guy breaks down that even a 1.5% monthly fee adds up way faster than you think. I had 14 clients pay between 45 and 90 days late in 2023 and I never tacked on a single penalty because I felt bad. Now I'm wondering if I should go back and bill them or just start fresh with a 30 day due date. Anyone else ever calculate what they lost by being nice about it?

3 comments

3 Comments

the_daniel6d ago

> "I let almost $4,800 slide by not charging late fees until 60 days overdue" Oh man, I felt this one in my gut. I counted up my losses last year and it was around $3,200 from being a softie. The worst part is I had one client who paid 90 days late on a $5,000 job and I just smiled and said "no worries." My wife still brings that up at dinner. I say start fresh with 30 day terms, it's way cleaner than trying to collect old money and looking like a jerk.

dianawilson6d ago

@the_daniel my wife still calls me Doormat Dan!

xena_hernandez986d ago

Wait, is nobody gonna talk about how sometimes being "nice" actually hurts the client too? @the_daniel I'm not defending the late payers or anything, but I had a guy who kept paying me late for months and I never said squat. Turns out he had no idea his billing person was messing up and he was embarrassed when he found out. He actually thanked me for finally telling him. Sometimes people don't even know they're costing you money and they'd rather fix it than lose you as a vendor. Not saying it's always the case, but the softie approach can blind you to actual problems on their end too.