Are late fees legal?
Are late fees legal?
HoneyBook is not legal counsel, so you should discuss your unique situation with your legal counsel to determine if the late fees you want to use are legal.
That being said, as long as you include in your contract that a late fee can be assessed for non-payment and the amount is reasonable, then late fees should be legal. This is why you should add a late fee stipulation to all of your contract templates and HoneyBook caps the late fee amount at 10%.
How will charging late fees help me?
How will charging late fees help me?
When your clients are aware that they can be penalized with a late fee, they’re more likely to pay on time. This directly saves you time and helps your cash flow become more consistent since you won’t have to chase them down for payment as often.
What are some late fee best practices?
What are some late fee best practices?
Never forgive late fees in exchange for payment of the original invoice amount. Your clients signed up to make these payments on time when they signed the contract, and clients should be ready to pay their invoice in full in exchange for your work.
Be fair and timely with your payment reminders. You’re much more likely to get paid on time with some gentle reminders, and will likely not need to pursue the payment in court after a late fee is assessed if you simply remind the client to pay.
Do not punish your clients with a late fee. These are meant to help your clients remember to pay on time, and are likely not going to be a meaningful addition to your cash flow (when compared to your actual service costs).
Are there any special payment collection rules for New York City?
Are there any special payment collection rules for New York City?
If your client lives in New York City and hasn’t yet paid by the contract due date, you can include their invoice in a formal complaint with New York City’s Office of Labor Policy and Standards. If you want to pursue this route for collections, you’ll want to discuss the Freelance Isn’t Free Act with your legal counsel.
What if I just can’t get the client to pay?
What if I just can’t get the client to pay?
If all else fails, you’ll want to consider reaching out to a debt collection agency or pursuing legal action to get your payment. If you want to go these routes, you’ll definitely want to consult with your legal counsel.
Still have questions? Feel free to send us a message by clicking the Question Mark icon on any HoneyBook page. Our team is always happy to help!