Glossary
What is late payment fee?
A late payment fee is a charge added when an invoice isn't paid on time.
It can be a flat fee or interest. You can generally only charge it if the customer agreed to it before the work, and it should reflect a genuine estimate of your costs.
Example
Terms that say "interest of 10% a year on overdue amounts" allow you to add interest to late invoices.
In Australia
Fees that are out of proportion to your real loss may be unenforceable, and unfair contract terms laws can apply to small business contracts.
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General information only, not legal or financial advice.