Late Payment Issues

Fees

We've added late fees now.

£1 + 20% of Monthly Recurring Revenue. (On shared/reseller hosting)

Having told customers they were coming, we switched them on.

It caught a few customers out, but all have paid them, lets see whether this turns our to be a good idea.

We'll report back in a couple of months.
 
Late fee and suspension usually solves the problem. if you did not practiced this technique before i recommend sending new email to customers where you would explain them what happens if payment is not done in time.
 
Suspend after 24 hours - those who tend to ride out the invoices will either leave (you don't want that type of customer anyhow) or pay the bill on time.

There's also a high rate of "abandonment" in this industry, as I'm sure you're aware of. Most of the time, those who aren't paying on time, more often than not are going to abandon the account.
 
prosecure said:
Well mate we Charge late fee on overdue Invoices.
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How many actually pay these late fee's though. (not your company, just saying in general). Most people would just abandon the account, when it gets that far anyway, you can count on the account being abandoned.
 
We give a 6 day grace period to pay your bill. On the 7th day your account is suspended and on the 30th day all your content is deleted from our backup servers and web servers. We don't believe in putting a measly penalty on someone for paying late...if they don't pay their service gets terminated.
 
The most effective thing, in my experience, is instant suspension upon being in arrears. I feel as though that's best done after several pre-due date emails and a due-date email being sent.
 
20% late is good, but service gets shut down after 7 days normally if they are that late then your not getting paid
 
In my experience, adding (or even just reminding the customer you will add) a 15% late fee is enough to make them pay up. Unless they're planning to never renew, in which case you should offer them the chance to cancel (much better than being suspended for non-payment).

Depending on the product, sometimes the late fee can range from 5% to 20%.

Good luck!!
 
eric1212 said:
In my experience, adding (or even just reminding the customer you will add) a 15% late fee is enough to make them pay up. Unless they're planning to never renew, in which case you should offer them the chance to cancel (much better than being suspended for non-payment).

Depending on the product, sometimes the late fee can range from 5% to 20%.

Good luck!!
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Your TOS should have a cancellation policy/process in place, so clients should be aware of this. If a client wants to cancel they could do this as soon as they get the invoice, which in our case is 14 days before the due date, if they dont cancel and dont pay the invoice then yes they get a late fee and account suspended for non payment and if it still remains unpaid the account is terminated but the invoice is left active as you will be surprised at how many will try and sign up again after being terminated. then depending on how much the invoice is for it may be passed onto a debt collection agency as between the due date and termination you have been hosting their files etc on your server.
 
Often, I find that clients that don't pay after 2-3 days just were too lazy to cancel their service. We terminate accounts after a week of late payment, and I know many providers who are more stringent than us.
 
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