Penalty for late payment?

[Tim Wilson]

[Mark Suszko] “If it wasn’t mentioned up front, I think it’s poor form to try to retroactively apply it. I say you put him on the “not so good” list, and he’s on a cash prepaid in full basis for any and all work to follow. “

I had a client who was actually pretty embarrassed about not paying (extenuating circumstances, blah blah blah). He appreciated that I didn’t try to add late fees, but also understood why I was going to ask for cash up front from then on. We were fine. Did a lot of business together.

My favorite trick was to come up with the “real” number for the job, then add 15%. THAT was the number I put on the invoice, with a “15% discount for early payment,” ie, 30 days. So if he pays “early,” he gets my “real” price. After that, the “penalty” is what he THINKS is the real price.

But yeah, no way you can add penalties after the fact. The only ethical way to change the terms of the deal while it’s underway is if you both consent.

Unless of course you’re operating a bank, credit card or mortgage company, in which case your clients have already signed a contract saying that you can change the terms at will. Then you’re golden.