Can You Charge a Late Fee if the Customer Does Not Pay on Time? | Operations > Billing & Receivables from AllBusiness.com
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Can You Charge a Late Fee if the Customer Does Not Pay on Time?

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If you find that customers are dragging out payments, you can charge them a late fee if they don't pay on time. However, this charge depends on your form of contract or purchase order.

The best way to have the right to a late fee is to put an explicit clause in your contracts or purchase orders. A typical clause will read:

"Payment. Payment by the customer is due and payable within 20 days of receipt of our bill. If payment is not received within said 20-day period, Customer will be assessed a late charge equal to 1½  percent of the unpaid amount per month."


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