A late fee only works if the client agreed to it before the invoice was late. Write it into your estimate and your invoice terms, keep it small and fair, and check your local rules first.
1Check the rules where you work
Some places limit late fees or interest. Ask your accountant, a lawyer or your local small business office. This guide is not legal advice.
2Say it before the job
Put the fee in the estimate, in plain words: "Invoices paid more than 15 days after the due date add a fee of 1.5% a month."
3Repeat it on the invoice
Add one line to the invoice terms with the same words. Then there is no surprise.
4Use it with care
Many businesses use the late fee as a reason to be paid on time, and waive it once for a good client. That is your call.
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Questions people ask
How big should a late fee be?
Smaller than most people think, and within your local rules. A fixed small amount or a small monthly percentage is common.
Can I add a late fee after the invoice is late?
It is much harder, because the client did not agree to it. Agree it up front.
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