Late Fee

[glorybound]

Leads work the same way. When I get a lead I automate a respond to it with a questionnaire, which helps pre-qualify clients. I always respond personally, even if they want 10 images for $200 in 2 day, but I don’t waste too much time. Again, I would spend the other 1/2 of my days following up on leads. I’ll have to look, but I probably received a dozen leads this week and 1/2 didn’t qualify and the other 1/2 I sent a quote.

[glorybound]

Honesty, I thought I would get replies like, I charge 2% or someone else charges 5%. To hear that you guys are not charging late fees is foreign to me. I read a lot about business, so I thought we were all practicing the same way. Here is a good article. I challenge someone to find me a business article about why you shouldn’t setup late fees.

https://blog.freelancersunion.org/20...dont-pay-time/

[dgruwier]

I think the logic of a contractual late fee is pretty solid, and 2% seems reasonable. If a customer BOTH can't deal with paying on time AND get hissy about having to pay a 2% fee that they already agreed to, I wouldn't work with them if I had the choice.

[glorybound]

I think the logic of a contractual late fee is pretty solid, and 2% seems reasonable. If a customer BOTH can't deal with paying on time AND get hissy about having to pay a 2% fee that they already agreed to, I wouldn't work with them if I had the choice.

Finally, someone talking sense I do agree my 2% is good, so I might leave it. Maybe, I'll move it to 5%, but not unless I think the project is risky.

[andybot_cg]

Bobby, I think we're talking about different things. You're talking about a business model, I'm talking about relationships. I'd say about 90% of my work is repeat clients. I typically give them a flat fee, and charge changes at an agreed upon hourly rate. My fee is "padded" as it were to account for overhead like late payments, etc so I don't have to niggle over details like a 2% late fee.

[glorybound]

I am about 50%-50% new and repeat clients. I like this just in case a repeat client jumps ship for some reason. I have too many people coming to me for work because their main client left for some reason.

[glorybound]

Bobby, I think we're talking about different things. You're talking about a business model, I'm talking about relationships. I'd say about 90% of my work is repeat clients. I typically give them a flat fee, and charge changes at an agreed upon hourly rate. My fee is "padded" as it were to account for overhead like late payments, etc so I don't have to niggle over details like a 2% late fee.

No, we are talking about the same thing, a business relationship. I had a guy who sent me a few projects a month. He got so comfortable with me he wanted to meet up sometime and not for business. When my family and I drove through his state to visit family in another state he wanted us to stop by for a visit, to meet his family. I say this because the second he hired someone to work in-house using Revit, to make mediocre renderings at best, the work flow stopped. I have worked in enough places and seen enough people sell their sole to the company just to get the boot because the wind changed directions. I think trust is important and that’s the kind of business I run, however, it works both ways. You trust me to do good work for you and I trust you to pay me on time.

I am not totally sure a late fee is the way to go, but everything I read says I’d be foolish not to have one.

[flino2004]

Late fee is stupid in my opinion.... 2% don’t make any difference and in some way is allowing your clients to be late.... I was out of the country, I don’t pay anything online when i’m Overseas for security reasons... so I came back and my bank called me 5 days after the due date for a credit card then they charged me $25 late fee, I said to them... why would I pay it right now if you already charged a late fee?, i’m Paying next due date..... I had the money of course but i was allowed to pay anytime after being late to my next due date because of that fee.
When Netflix started business renting DVDs they didn’t charge late fees meanwhile Blockbuster was charging late fees.... do you see Blockbusters around.?

[glorybound]

Agreed, to a point. I’ll have to think about this one some more. How do the studios do it?

[Streetwise]

I've had pretty good luck with an "early payment" discount. Not sure how that might apply in your case, but generally speaking the clients I have offered this to have taken advantage of it.

[glorybound]

I might just be being picky. I try to keep a 3-4 month money buffer, so it has little to do with needing the money. I pay my bills before they are due, credit cards payed off every month... I just expect people to pay their bill when it’s due. I just got an email today that accounting must have misplaced the invoice. I was told that it was in the mail twice and now, two months later, accounting misplaced the invoice and they are cutting a check in the next two weeks. This kind of stuff drives me crazy and if I can avoid the frustration would be great.

[JezUK]

Bobby,

I don't have such mechanisms in place, as my payment terms are simple and the clients pay me on time (i.e. either 50% upfront if it's a big job, or 100% upfront if it's a small job and/or the client is abroad).

I think your business model is more a function of the type of client base you have, i.e. the building industry, a sector I personally don't have a lot of clients in because of it being very price sensitive (in my experience) and I can't be doing with racing to the bottom.... (and losing in any case....).

But your posts have reminded me that when I recently worked in collaboration with a larger visualisation house (I'm a one-man outfit), their payment terms to me were 10% late payment fee, and that makes me feel that your 2% is paltry and not really going to make anyone sweat.

So, maybe you should consider the same ? i.e. raising yours to 10% ??

Furthermore, I've recently had a bad experience with a prospective new client (who turned out to be a complete time waster), so my bull-shit detector is currently ultra-highly sensitive, but regarding your current email ('was in the mail twice, now, two months later......").... I'm sure you know this anyway, but they are taking you for a complete and utter ride (i.e. they are lying through their teeth)......

[glorybound]

Furthermore, I've recently had a bad experience with a prospective new client (who turned out to be a complete time waster), so my bull-shit detector is currently ultra-highly sensitive, but regarding your current email ('was in the mail twice, now, two months later......").... I'm sure you know this anyway, but they are taking you for a complete and utter ride (i.e. they are lying through their teeth)......

Yeah, he has been asking for his final images for a month now. Just yesterday, when he said that the check is being cut within the next two weeks, he asked for his final images again.

[JezUK]

Yeah, he has been asking for his final images for a month now. Just yesterday, when he said that the check is being cut within the next two weeks, he asked for his final images again.

He hasn't got the money.

Do your clients pay you via cheques still ?? (this option is something I removed off my quotes/invoices nearly two years ago now).

[glorybound]

He hasn't got the money.

Do your clients pay you via cheques still ?? (this option is something I removed off my quotes/invoices nearly two years ago now).

80% of my payments are online, but some do still write checks, especially the big guys.