Should You Charge Customers Late Fees?

When it comes to getting customers to pay on time, business owners typically use two approaches — carrots and sticks. Pay your bill early and you get a nice discount. Pay your bill late and you get smacked with a late fee.

The trouble is that neither of these solutions does the job it’s intended to do. Quick payers who’d pay on time anyway often take advantage of early-payer discounts, cutting into your company’s profit margin. Slow payers — often cash-strapped consumers or small business owners themselves — don’t have the money to pay late fees and may not pay you at all.

What’s the answer? Scrap this ineffective system of rewards and punishments and try to figure out why your customers are paying late and what you can do to make them pay you faster.

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When it comes to getting customers to pay on time, business owners typically use two approaches — carrots and sticks. Pay your bill early and you get a nice discount. Pay your bill late and you get smacked with a late fee.

The trouble is that neither of these solutions does the job it’s intended to do. Quick payers who’d pay on time anyway often take advantage of early-payer discounts, cutting into your company’s profit margin. Slow payers — often cash-strapped consumers or small business owners themselves — don’t have the money to pay late fees and may not pay you at all.

What’s the answer? Scrap this ineffective system of rewards and punishments and try to figure out why your customers are paying late and what you can do to make them pay you faster.

For example, let’s see… Leer más “Should You Charge Customers Late Fees?”