Late Fees

Due to a pain-in-the-ass client I’m revising the “late fee” section of my contract for future PITAs and was curious as to how others define their own policy. For example, do you charge a % of the balance due for every week it’s late or a flat-fee (weekly or one-time)? I’m not looking for details, just want an idea of what’s considered fair and reasonable for both parties by other designers.

Todd

Portfolio: http://www.xiiro.com
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1.5%/month, compounded monthly, on any outstanding fees.

Walter

On Dec 13, 2011, at 2:14 PM, Todd wrote:

Due to a pain-in-the-ass client I’m revising the “late fee” section of my contract for future PITAs and was curious as to how others define their own policy. For example, do you charge a % of the balance due for every week it’s late or a flat-fee (weekly or one-time)? I’m not looking for details, just want an idea of what’s considered fair and reasonable for both parties by other designers.

Todd

Portfolio: http://www.xiiro.com
Twitter: @ImXiiro
Skype: toddbrilliant


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On 13 Dec 2011, at 19:14, Todd wrote:

For example, do you charge a % of the balance due for every week it’s late or a flat-fee (weekly or one-time)?

I have a clause in my T&Cs about interest being charged at 3% over a certain bank’s base rate per month on outstanding payments. I can say it has worked, because the first time most slow payers receive an itemised statement they pay up pretty promptly.

New clients are asked for a 50% up-front payment on accepting my quote. This has already served me well where one client wanted work done, paid the “deposit” and then promptly disappeared.

How this may work in the current economic climate remains to be seen. It’s tough out there.

Cheers

Heather


Imagic Design * Good Design - No Compromise
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And just jumping on the back of this, at what point does it become a ‘late fee’?

A lot of my work is for design agencies and their terms are 60 or 90 days from invoice date. 60 I’m okay with (to a certain extent), 90 I feel is taking the p*** a little bit, so what’s everyone’s average wait time? Almost all of my work is illustration rather than ongoing like websites.

There’s no way I would ever be able to ask for a % up front so all of my payments are rear ended.

Just curious as to what everyone else has to put up with.
Trev

On 13 Dec 2011, at 19:20, Walter Lee Davis wrote:

1.5%/month, compounded monthly, on any outstanding fees.

Walter

On Dec 13, 2011, at 2:14 PM, Todd wrote:

Due to a pain-in-the-ass client I’m revising the “late fee” section of my contract for future PITAs and was curious as to how others define their own policy. For example, do you charge a % of the balance due for every week it’s late or a flat-fee (weekly or one-time)? I’m not looking for details, just want an idea of what’s considered fair and reasonable for both parties by other designers.

Tod


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On 14 Dec 2011, at 07:52, Trevor Reaveley wrote:

And just jumping on the back of this, at what point does it become a ‘late fee’?

In my case, whatever it says on the front of the invoice. Normally that’s 14 days from the invoice date.

You gotta be tough to get paid. I’m not tough. =o(

Heather


Imagic Design * Good Design - No Compromise
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Yes, on my invoice it says 30 days, which I thought was reasonable given all of my clients timescales, but they tend to ignore that and go for their own terms of 60 or 90 days.

T

On 14 Dec 2011, at 07:55, Heather Kavanagh wrote:

On 14 Dec 2011, at 07:52, Trevor Reaveley wrote:

And just jumping on the back of this, at what point does it become a ‘late fee’?

In my case, whatever it says on the front of the invoice. Normally that’s 14 days from the invoice date.

You gotta be tough to get paid. I’m not tough. =o(

Heather


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On 14 Dec 2011, at 08:01, Trevor Reaveley wrote:

Yes, on my invoice it says 30 days, which I thought was reasonable given all of my clients timescales, but they tend to ignore that and go for their own terms of 60 or 90 days.

I think this is something that should be covered in negotiation when first setting up dealing with them.

I think you need to be adaptable. If you need the business, like the client, and they won’t be swayed from their 60 or 90 days, then you have to roll with it.

If they don’t pay on time, then the penalties hit. Just as they would with their clients.

Heather


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That’s the thing – if you are letting them dictate the terms, then that’s a different relationship. In that case, I would argue that you should build the late fee into your estimate. You did the work, and if you have to wait to be paid, your vendors (landlord, etc) will not extend you the same courtesy, so you have carrying costs – paying for your money – and you’ve already worked out how long it will take you to get that money, so the math is easy.

If you enter into an agreement with a client (as Heather does, as I do) and that agreement spells out a payment schedule and the fees for missing it (kind of like your credit card agreement) then nobody is surprised by that bill, and it can all go smoothly. If you are in a one-sided relationship, where an agency is buying your work product, getting to use it and bill for it, and then dictating to you (see how funny this seems when I put it this way?) when they will get around to paying you, then you have a horse of a different color.

I started my business as an advertising photographer back in Phoenix, Arizona, in 1984. That lasted for 6 years before I got married and moved to Philadelphia. In that time, I certainly experienced what you describe – that feeling that if I didn’t cave to my clients, I wouldn’t get another job from them. But that relationship is bent – it’s putting all the burden of capitalization on the back of the weakest member of the relationship. If you can’t change that relationship, then either seek out one more of a peer-to-peer basis, or simply acknowledge that the inequity is there and make a change in your rates to compensate for it ahead of time. At one point, I raised my rates by 100%. I booked fewer jobs that year, but made lots more money, and was much happier with the kind of work I got to do.

And don’t ever feel bad about asking for a deposit or an advance to cover your initial investment in a project. Actually, refer to this as a retainer. At least in the US, there are specific legal meanings to that term. For one thing, you have to give a deposit back, but a retainer is yours, even if the project goes completely sour and is not completed.

Walter

On Dec 14, 2011, at 2:52 AM, Trevor Reaveley wrote:

And just jumping on the back of this, at what point does it become a ‘late fee’?

A lot of my work is for design agencies and their terms are 60 or 90 days from invoice date. 60 I’m okay with (to a certain extent), 90 I feel is taking the p*** a little bit, so what’s everyone’s average wait time? Almost all of my work is illustration rather than ongoing like websites.

There’s no way I would ever be able to ask for a % up front so all of my payments are rear ended.

Just curious as to what everyone else has to put up with.
Trev

On 13 Dec 2011, at 19:20, Walter Lee Davis wrote:

1.5%/month, compounded monthly, on any outstanding fees.

Walter

On Dec 13, 2011, at 2:14 PM, Todd wrote:

Due to a pain-in-the-ass client I’m revising the “late fee” section of my contract for future PITAs and was curious as to how others define their own policy. For example, do you charge a % of the balance due for every week it’s late or a flat-fee (weekly or one-time)? I’m not looking for details, just want an idea of what’s considered fair and reasonable for both parties by other designers.

Tod


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I send my wife round, she certainly scares me.

K


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I send my wife round, she certainly scares me.

[Laughs] That’s excellent. I’m gonna have to get married.

Todd

Portfolio: http://www.xiiro.com
Twitter: @ImXiiro
Skype: toddbrilliant


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