The point is that the vast majority of small businesses see late payments in perspective. They accept them as an undesirable, but in many ways unavoidable business cost. So they do the sensible thing and cost them into their business plan, and so their charges reflect this (and all other costs). I very rarely come across a CM who even has a business plan, let alone includes a consideration of this type of cost.
That's not entirely the fault of CMs. This sort of thing stems from two basic problems. First, childcare fees are way too low to make for a seriously sustainable business, all things considered. (This alone has various undesirable knock-on effects, such as allowing the government to pay a pittance when they base funding rates on already-underpriced basic rates.) Second, CMs are still badly-served by various trainers, support workers and organisations like Pacey who keep on advising them to set their fees to match other CMs in their area when starting up. This has the obvious effect of depressing fees over time, usually around the lowest common denominator, and hardly anyone does a realistic assessment of their running costs.
Responses to late payments in the childcare industry are not very businesslike. Some just let them build up before they act at all, at which point it may be too late. Other responses are a bit knee-jerk and drastic.
Most childcare providers' late fee policy would be unenforceable if push came to legal shove. To create an enforceable level of late fees would probably make the charge so low as to hardly bother anybody in any case.
Other businesses encourage prompt payment by positive incentive, rather than by punitive charges. In reality, it amounts to little more than turning late payment fees on their head, but it very often works. Simple psychology: people respond to something positive but don't like to think their being penalised.
Withdrawing care carries a risk of reputational damage which could have serious consequences. By the time anyone reaches this point, they should probably have already given notice and moved on to a more reliable client.