Late payment fee's

[Wend]

Hi everyone,

Does anyone add a late fee charge if payments are late? I'm thinking of adding something on to my invoices but not sure how much to add and how long to give them before it is added

Thank you

[AliceK]

My contracts state 10% of outstanding £ per day. I have had to charge it twice since I started. It's a very good incentive for people to pay on time. I am very strict about being paid on time. If a parent can't pay cleared funds by the last day of the month for eg pay days at work etc then they need to let me know when signing contracts and then I can agree a later payment due date for them but otherwise the money needs to be there or they will get a late payment charge as per their contract.

xx

[bunyip]

If it's a day or 2 I tend to let it go. I'm paid in advance of providing the care, so it's not as if anyone is withholding fees for work I've actually done at that point.

Beyond that, as a first step, I add a late payment fee to the next invoice then cancel the fee on the same invoice, so it's not actually charged. Sounds dumb? Well the idea is purely to draw it to the mum's attention. This gives a certain degree of leverage if I have to apply the charge in future: "well, it's not come out of the blue - please refer to your previous invoice." etc. Call it a 'threat' if you like, but it's jolly effective.

I also make it clear that late payers may lose the right to pay by certain methods, ie. cheque or childcare vouchers, and be obliged to pay by cash or BACs, so I can see the payment pretty much guaranteed. This is also a good tool, as mums don't want to lose payment options which are convenient or help them save money.

This: "I'm thinking of adding something on to my invoices but not sure how much to add and how long to give them before it is added " suggests to me that you don't already have late payment fees stated within your contracts. You cannot just decide to add a non-contractual charge like this. It is a substantive change to the agreed Ts&Cs. You're going to have to redraw the contract or add a contract variation, signed by both parties, and allow the usual notice period for it to come into effect.

Are you paid in advance or in arrears of providing the care?

[shortstuff]

I have to say i operate where I point out to a parent that being x days late would incur x charge. I will then point out that as it is a 1st occurance I will waive the charge. I Also point out that if it happens again i will charge them.

My current charge is £5 per day

[Wend]

If it's a day or 2 I tend to let it go. I'm paid in advance of providing the care, so it's not as if anyone is withholding fees for work I've actually done at that point. Beyond that, as a first step, I add a late payment fee to the next invoice then cancel the fee on the same invoice, so it's not actually charged. Sounds dumb? Well the idea is purely to draw it to the mum's attention. This gives a certain degree of leverage if I have to apply the charge in future: "well, it's not come out of the blue - please refer to your previous invoice." etc. Call it a 'threat' if you like, but it's jolly effective. I also make it clear that late payers may lose the right to pay by certain methods, ie. cheque or childcare vouchers, and be obliged to pay by cash or BACs, so I can see the payment pretty much guaranteed. This is also a good tool, as mums don't want to lose payment options which are convenient or help them save money. This: "I'm thinking of adding something on to my invoices but not sure how much to add and how long to give them before it is added " suggests to me that you don't already have late payment fees stated within your contracts. You cannot just decide to add a non-contractual charge like this. It is a substantive change to the agreed Ts&Cs. You're going to have to redraw the contract or add a contract variation, signed by both parties, and allow the usual notice period for it to come into effect. Are you paid in advance or in arrears of providing the care?

Hi bunyip,
Thank you for your reply. No I didn't state it on my contracts I was very confused about the whole contract malarkey when I started out and just did a basic one. I will have to add a contract variation then oops! Thank you for drawing my attention to that. I get paid in advance so I think I did one thing right whew!
Thanks for your help though x

[Kiddleywinks]

Just a heads up over the correct procedure to vary an existing contract...

As Bunyip rightly pointed out, it's not quite as simple as letting parents know and running with it. During the notice period, any parent that does not agree to the new terms can use that period to give notice, or both parties can renegotiate terms.

Do you have a contract review date?
It can be much easier to utilise this date to introduce any new terms, as you have had time to 'reflect on your working practice' rather than the parent know it's because they're rubbish payers lol.
Parent, again, can decide NOT to renew contracts, but to be honest, if you're constantly having to chase payment, are they worth keeping anyway?!

[FussyElmo]

Hi bunyip,
Thank you for your reply. No I didn't state it on my contracts I was very confused about the whole contract malarkey when I started out and just did a basic one. I will have to add a contract variation then oops! Thank you for drawing my attention to that. I get paid in advance so I think I did one thing right whew!
Thanks for your help though x

You learn with each contract you do. I always put on mine NO FEEs NO CARE.

My parents always let me know if they have payment issues

But its a learning curve