Can You Charge a Late Fee if the Customer Does Not Pay on Time?


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I find that customers are dragging out payment owed
to us. Can I charge them a late fee if they don’t pay on time?


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It 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 % of the unpaid amount per
month.”