Late payment fee?

[bigpaws]

Thinking of starting a fee of £5 per day for late payment. Does anyone else charge a fee? And if so, has it resolved issues with late payers? I now invoice parents on the first of the month for the full month in advance, however it is taking me a week to chase vouchers/cheques, so still getting paid mid month in theory. Would a £5 per day cause ill feeling, or remind my parents I am running a business?!

Maybe warn parents that you intend to charge for late payment and see if that makes them pay on time?

Or you could just send in a bill saying 'X' charge if paid before this date and 'X'+£5 charge after this date? :)

I invoice parents on the 15th of the month, for payment by the first of the next month (ie April invoice went out on 15th March). Gives them plenty of time to arrange vouchers, pay before going on holiday etc. I have a flat £25 fee, but I am thinking of changing it to a daily amount, otherwise, once they're late, it doesn't matter how late ...

I remember what I do if they're too late ... I tell them they can't bring their children til they pay (you can tell I haven't done this for a long time).

As an alternative, could you offer a discount for those paying by standing order perhaps? If you tot up how much time it takes chasing the late payers, this might be offset. I'd certainly jump at the chance (and I'm a late paying felon )

I charge a late payment fee.

I invoice around 20th of the month before, so that allows up to 11 days for parents to sort out payment for the 1st day of the following month. On the bottom of the invoice I state clearly that I charge £10 a day for every day that payment is late, and that repeated non-payment will mean I stop taking the child.

I never had to charge anyone the £10 fee.

I tend to give my invoices out during the last week of the month ready for the 1st of the following month. I suppose I'm just annoyed this month that parents are late with cheques not considering the 2 Bank Holidays. My money is never cleared in my account for the 1st. I will certainly consider a late payment charge.

I think this would be reasonable. Our nursery has just introduced a late payment system with a fine of £20 for missing the 15th-of-the-month deadline, with another £20 if it is still unpaid 7 days later, and a loss of Nursery place after a further 7 days. Personally I think this is rather too steep and draconian, but £5 is a perfectly sensible amount.

You should, as Nursery did, give plenty of warning that you are going to introduce this, including specific warnings when the deadline you are going to set is missed (i.e. if you were this late paying after July, you would be having to pay a fine now). I carrot & stick option would also be good - perhaps integrate it next time you revise your fees, with an automatic discount for anyone who pays up before the 5th of the month, and an increasing scale of charges if they are later than the 15th.

The other thing I do is I don't accept cheques at all

The only methods of payment I've accepted are cash, or direct bank transfer. If someone wanted to use vouchers then I'd set that up, but it would be on the basis that the parent was still responsible for ensuring that payment was cleared before the 1st of the month, and if not, then they'd get charged.

I don't take cheques either.

• Bank Transfer
• Vouchers
• Standing Order
• Cash

That's it.

Thank you for the suggestions. Bank transfers instead of cheques would help reduce my delay in payment.