Does anyone charge a late payment fee? If so, what is the percentage rate for US?
Thread poster: Phoenix III

Phoenix III  Identity Verified
United States
Local time: 05:21
Member (2013)
Spanish to English
+ ...
Jun 2, 2016

An agency has the habit of paying late. They claim 45 days but it's more like 55-60. A new client wants to pay when they get paid and I put my foot down. So, if they cancel the project It's not my job to finance them or anyone for that matter. I want to insert in every invoice, that payments after the due date are subject to a late payment of 1.5 or whatever percentage rate is legal and binding. However, I want to go by industry standards. Thanks in advance for your input. I think it will benefit us all.

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Georgie Scott  Identity Verified
France
Local time: 11:21
Member (2009)
French to English
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10% Jun 2, 2016

My late payment fee is 10% per month (simple not compound interest).

If you send a final notice in France in theory interest begins accumulating at the legal interest rate of around 1% a day.


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John Fossey  Identity Verified
Canada
Local time: 05:21
Member (2008)
French to English
Nominal rates Jun 2, 2016

A typical rate in North America is 1.5%, but no one (in business) ever pays it. And you might as well consider it uncollectible - how are you going to sue someone to enforce payment of the tiny amount it represents?

It's not the same in B2B business as B2C business, where the late payment charge will be simply added to next month's invoice.

45 to 60 days is actually pretty typical for business collections. I will tell clients my terms are net 30 days but I tolerate 45. In fact I won't get too excited if they pay within 60 days. At 60 days, however, I tend to put my foot down.

Better is to do due diligence on a client before starting work, to see if they have a history of timely payment.

[Edited at 2016-06-02 14:28 GMT]


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Phoenix III  Identity Verified
United States
Local time: 05:21
Member (2013)
Spanish to English
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TOPIC STARTER
1.5% Jun 2, 2016

This is what I thought but it's just that I feel frustrated. Our rates continue to plummet, unqualified people lower their rates just to get business which in turn lowers rates globally and to top it off we see not 30 days but 90. Not to mention everything else. I don't mean to sound negative it's the sum of what I've seen happening especially in the last 3 years. Georgie and John, many thanks for your input. It's greatly appreciated.

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Tuguldur Batmunkh  Identity Verified
United States
Local time: 05:21
English to Mongolian
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Fixed late fee Jun 2, 2016

Phoenix III wrote:

An agency has the habit of paying late. They claim 45 days but it's more like 55-60. A new client wants to pay when they get paid and I put my foot down. So, if they cancel the project It's not my job to finance them or anyone for that matter. I want to insert in every invoice, that payments after the due date are subject to a late payment of 1.5 or whatever percentage rate is legal and binding. However, I want to go by industry standards. Thanks in advance for your input. I think it will benefit us all.


Businesses asses a small fixed late fee after the due, and interest penalty after certain days. However, it is more corporate level rules. for us, as solo-partnerships, it always ends up negotiating with the client rather than imposing penalty of fees in order to keep business working. I, personally, search the clients' reviews to see if there is any payment issue before confirming any PO, as John Fossey mentioned.


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Phoenix III  Identity Verified
United States
Local time: 05:21
Member (2013)
Spanish to English
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Good until no more Jun 2, 2016

Tuguldur Batmunkh wrote:

Businesses asses a small fixed late fee after the due, and interest penalty after certain days. However, it is more corporate level rules. for us, as solo-partnerships, it always ends up negotiating with the client rather than imposing penalty of fees in order to keep business working. I, personally, search the clients' reviews to see if there is any payment issue before confirming any PO, as John Fossey mentioned.


In the translation business there are no rules. I've seen people that were timely play games with payments. I've confirmed PO's, rates, etc. and they find excuses to lower the rate, like new words by magic become repeated or fuzzies. I've done my homework and dealt with agencies with an up to then impeccable record who turned out to be quite unprofessional (or maybe I had a turn at an unqualified or rookie PM?) I feel that perhaps, maybe if I insert a line at the bottom of my invoice, it will send a message... be serious because I am. Maybe?


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mariealpilles  Identity Verified
France
Local time: 11:21
Member (2014)
English to French
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late payment fees Jun 2, 2016

I have been so fed up with people paying late that I do charge late payment fees: 10% after the last day of expected payment and a week later, 0.5% per day late. Then they usually pay because the bill goes up fast.

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Phoenix III  Identity Verified
United States
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Spanish to English
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I like that! Jun 2, 2016

mariealpilles wrote:

I have been so fed up with people paying late that I do charge late payment fees: 10% after the last day of expected payment and a week later, 0.5% per day late. Then they usually pay because the bill goes up fast.


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Sheila Wilson  Identity Verified
Spain
Local time: 10:21
Member (2007)
English
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Do they actually pay? Jun 2, 2016

mariealpilles wrote:
I have been so fed up with people paying late that I do charge late payment fees: 10% after the last day of expected payment and a week later, 0.5% per day late. Then they usually pay because the bill goes up fast.

I can't imagine any company rushing to pay late fees when they didn't rush to pay the invoice in a reasonable time. And it might not be enforceable in the courts.

My advice to the OP is to seek clients who both seem nice and have a good payment reputations. I would insist on 30-day terms maximum, and set a limit on the amount outstanding if more work is to be accepted. A reminder for an occasional invoice might be acceptable, as long as payment arrives promptly - we can all overlook things. But if a good payer becomes a poor payer then there's only one safe thing to do: collect what's owing and refuse further work (unless paid for in advance, I suppose).


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mariealpilles  Identity Verified
France
Local time: 11:21
Member (2014)
English to French
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late payment Jun 3, 2016

They do not rush to pay, but they eventually pay when they realise that I am adamant. And if you write a post on the BB, then they come up with some excuses such as "I did not get your invoice...", all lies because it was sent with the translation which they did get!

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Tomás Cano Binder, BA, CT  Identity Verified
Spain
Local time: 11:21
Member (2005)
English to Spanish
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Irrelevant Jun 3, 2016

Phoenix III wrote:
A new client wants to pay when they get paid and I put my foot down.

What happens between your client and their clients is irrelevant. Your business relationship is with your client only, so they have to pay at a certain agreed date. It is they duty to go to the bank and ask for a loan if they have to pay bills before being paid. Or are you a financial institution?


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Samuel Murray  Identity Verified
Netherlands
Local time: 11:21
Member (2006)
English to Afrikaans
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Depends on your state's laws Jun 3, 2016

Phoenix III wrote:
I want to insert in every invoice that payments after the due date are subject to a late payment of 1.5 or whatever percentage rate is legal and binding.


For those who want to Google Marjorie's answer, she lives in Florida.

Marjorie, each state in the USA has different laws (or no laws) regarding late payment interests, penalties and fees. If Florida does not have late payment laws for ordinary citizens, then you can't charge for late payment unless the client had agreed to it before you accepted each job. You can't just write a late payment statement on the invoice and expect it to be binding. An invoice is not a contract.


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Angela Rimmer  Identity Verified
United Kingdom
Local time: 10:21
Member (2014)
German to English
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Agree with John Fossey Jun 3, 2016

John Fossey wrote:

A typical rate in North America is 1.5%, but no one (in business) ever pays it. And you might as well consider it uncollectible - how are you going to sue someone to enforce payment of the tiny amount it represents?

...

45 to 60 days is actually pretty typical for business collections. I will tell clients my terms are net 30 days but I tolerate 45. In fact I won't get too excited if they pay within 60 days. At 60 days, however, I tend to put my foot down.

Better is to do due diligence on a client before starting work, to see if they have a history of timely payment.


Agreed; this is also my approach. Enforcement is an issue, it seems more hassle than it's worth, and I will also tolerate 45 days, although I'm not too happy about that. And obviously due diligence is a must; prevention is key.

If I do have a potential non-payer (which does not happen too often), I will send a "friendly reminder" after the invoice is about 7 days overdue, with a request for information on when the invoice will be paid, and then after another week's grace period, I will email, and then call, and then keep calling until they realise that if they don't agree to a specific date on which the amount will be paid, or if they don't pay, they will not get rid of me. This approach has never failed me in the past. If all else fails, I do have insurance for non-payers as a backup. As yet I have not needed to make a claim, though.

Once a late payer has paid, I take it on a case by case basis as to whether or not to continue accepting job requests from them.

[Edited at 2016-06-03 06:46 GMT]


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Does anyone charge a late payment fee? If so, what is the percentage rate for US?

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