Financial Resource

Late payment charges have always been an issue among corporate credit and finance executives. Charging customers a penalty for paying their invoices late and the effectiveness of doing so have been topics. Should your company assess a charge to customers that pay late, and what should you call that charge?

In one survey of more than 300 credit and finance executives nearly 40% of those surveyed reported that their company does assess a charge to customers who pay late. While more than 20% of those classify it as an interest charge, nearly 45% call it a service charge. In addition, of those that do charge some sort of fee for late payment on past due accounts, more than 85% reported that they stipulate the late payment fee on their credit applications they have their customers complete. Unfortunately, of those respondents claiming they assess a late fee, nearly 50% reported that they do not strictly adhere to the policy.Accounts that are more than 50% do assess late charges when a customer becomes 30 days past due. Nearly 25% begin to assess the charges when they are less than 10 days past due. For more Commercial Collection information please check out our site, with useful resources and tools, like our interactive business recovery chart, where you can see the aging on the accounts receivable. When you need help on; collecting a debt, managing your accounts receivables or increasing cash flow is a great idea hiring a third party commercial collection agency, this can result on releasing the stress of your bad accounts, so you can focus on running your business.

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