A lot of the Late Fee conversations are from 2009. Anybody have any current info or suggestions on how and when to charge late fees, and at what percentage?
We’ve been doing 2.5% for every 15 days, and have seen some improvement. However, some of my google search results say not to go over 10% within a year.
In some areas there are laws on how much you can charge for a late fee. Most say 10%. Even if there is no law, a judge could determine what is reasonable if the customer disputes the late fee. You can’t charge 50% for being 1 year late.
I read the same thing about the 50%. I also read you can’t max out 10% in a year depending what state you’re in. I’ll have to check with my legal counsel about that. But I did change it to 1.2% every 30 days or 10% every 12 months.
A lot of people said they also give incentives for paying earlier with in those payment terms. Something else to look into.