Do you charge a late payment fee or penalize late payments?
I haven't in years. People will not pay them and I do not find they facilitate payment any quicker.
We do charge a late fee for anything over the terms on contact. We do however waive the charge if they let us know what the situation is and when we can expect payment. If anything it helps us start a conversation with the client.
We state in our terms & conditions that late fees will assess at X days past due and, if unpaid, we charge them. And we let them stand - waiving them only occasionally and after a comprehensive review of the payment history of the account. If it's the first time for the late payment, we may reverse the charge after confirming with the customer that our terms are for payment ON TIME. Maybe other industries have larger margins that allow for more latitude. There's a time value for money and I don't want my company to be anyone's bank. If there's no penalty for late payment, the customer will pay everyone else first.