Took a client's angry voicemail about my late fee policy seriously

A customer called me last month screaming about how I charged a 5% late fee on a 60 day overdue invoice. Said it was 'punishing small businesses for being broke.' That stung cause I used to be the one paying late too. So I switched my terms to offer a 2% early payment discount if they pay within 10 days instead of the late fee. So far 3 out of 5 new clients have taken it. Has anyone else tried the carrot over the stick approach?

3 comments

3 Comments

flores.mark10h ago

Respectfully I see it differently. Discounts only work if the cash flow is steady enough to wait. I tried 1.5% early payment for 10 days and two clients just ignored it. Still paying late, no discount taken. Late fee at least got their attention.

fionanguyen22h ago

Last time I tried the carrot approach my cat ate the invoice and missed the payment anyway.

zarag1719h ago

Haha yeah cats and paperwork don't mix. I see it differently though @fionanguyen. I think the carrot approach still works if you automate the whole thing instead of relying on a paper trail. Set up online reminders and auto payments so there's nothing to physically lose or get eaten. That way the only thing your cat can mess with is the treat you give yourself for staying on top of it.