My freelance writing business operation is never quite as tight as I think it is. For instance, last week I waited much longer than I should have to get paid for projects I worked very hard to turn in on deadline. Now to be fair, these clients have never been late paying before, so I'm sure the holiday had a lot to do with it. But my bills could care less about Thanksgiving.
Are Late Fees Really Necessary?
On the one hand I want to be understanding. These clients have never had a problem paying on time before, and they did pay me immediately on yesterday. But on the other hand my business pays the majority of our living expenses right now. I don't expect my money the same day or the next day after completing a project. I provide a generous grace period of 14 business days to receive a balance due. I am open to negotiating that time period based on individual circumstances (e.g. a corporate client who invoices monthly, etc.). However, until I build up a surplus of income, I cannot afford to be left hanging when the bill is due.
Late Paying Clients Can Cost You
I'm fortunate that I haven't had many problems with deadbeat clients who never pay. I once had a client who only managed to pay me once on time. The rest of my time working with him was spent trying to get the balance due before we could start on a new project, or getting the down payment in time to start a project and meet his projected deadline. Needless to say we soon parted ways. But that experience helped me tighten up my client contract. I just didn't realize there was still more work to be done, so I have once again updated my contract.
Protect Yourself from the Unexpected
Most of my clients pay by Pay Pal, which aside from those pesky fees I pay to receive my money is very convenient. I do have one or two clients who prefer to send checks. Can you believe that I had never included a returned check fee on my contracts? Thankfully I've been primarily dealing with professionals. As of this past weekend, I have now added a late fee. Now all I need to do is add this information to my rate card and I'm all set.
I had never considered including a late fee before because it had never been an issue. But why wait for something to become a problem before addressing it? If you charge late fees, how has it affected your client relationships? How often have you had to charge clients for making late payments?