Navigating late fees can be tricky. On one hand, they’re a standard practice in our industry. On the other, they might sour a once-good relationship.
Recently, a client was over a month late, and I chose to let it slide, but it still stings.
Honestly, I used to avoid late fees because I thought they were too aggressive. Big mistake.
Now I include them in every contract but keep them reasonable:
- 1% after 15 days
- Another 1% after 30 days
- Collection agency referral after 60 days
The key thing I learned is that late fees actually protect good clients. When you eat the cost of late payments, you end up raising your rates for everyone to cover those losses.
I’ve only had to actually collect late fees maybe three times in the past year. Just having them listed makes people prioritize your invoice.
One client told me they pay invoices with late fee clauses first because they know those freelancers are serious about their business. That stuck with me.
I just ask for payment when the job is done.
I charge them but waive them half the time. Started doing this after getting burned on a few big invoices.
My terms say 2% after 30 days, but if someone calls and explains what happened, I usually drop it. Had a client whose bookkeeper quit without notice - stuff happens.
The fee is really there to make people think twice about paying me last. Works pretty well. Most people who see it on the invoice will call right away to work something out.
Only time I keep the full fee is when someone ignores my calls and emails. If you make me chase you down, you’re paying extra.
Late fees might be necessary. Clear communication from the beginning can help avoid misunderstandings.
Put late fees on every contract. I usually charge 3% after 30 days. Late payments cost you time and money. You end up making phone calls and sending emails instead of working on paying jobs.
Let new clients know that late fees help keep prices down for everyone. Good clients get it while bad clients complain. Collected late fees maybe six times last year. Everyone else paid on time.
Including late fees in contracts is a good idea. It helps set clear expectations. I usually charge about 1.5% per month if they’re late after 30 days.
Most clients avoid late fees by paying on time. Those who are late usually don’t pay even without fees, so you may as well benefit from them when they do.