Charging late fees

Most corporate companies have a 90 day turn around time when paying their bills.

And most companies that work with corporations know that.

Now the small company is usually a little better. I would just make a policy that any payments not received within 30 days from date of invoice, service will be suspended until payment is made.

But then again, i've only ever had 1 private client not pay me in a timely fashion. That was about 5 years ago when I was doing free lance web design. He did not pay me within 60 days, kept jerking me around, so I removed his site. Put up a page that said this site has been removed due to non-payment.

... large companies, but it does seem a bit long to wait for payment.

However, whatever time you consider too long, whether it be after 30, 60, 90 days, you could add something to your contract that stated that accounts that go unpaid after X number of days will be charged a 12% (or whatever) annual interest (prorated to a monthly amount) on the unpaid balance. I've seen similar inclusions quite often.

Your money out of the Sodds. It at least makes them think in the accounts department, but it can also have the other effect of stoping payment and then you have to start court action to recover your money.
Not the best way to get on with a New client as it will probably be your last call to them and their friends ever. It is a bit of a tight rope this one and while I put the 8% interest on all accounts I generally wave it upon payment within a reasonable time like if it's a 30 day account within 60 days. You'll have to make up your own mind on this one though and Maxwell is right most of the credit cards have a 21% interest rate if not higher. So you could treat your non-paying customers the same way a bank does but unlike a bank they can always go elswhere and just forget to pay.
You have to find the middle ground where you don't upset your clients too much but you don't go broke waiting for payment either. But on the good side as you said most of your work is Consultancy and only 2% is hardware so in the event of them not paying you arn't loosing out too much.
You can always afford to lose a bit of Labour without too much pain but it is totally different story when you have already had to lay out money for their needs.
At the moment before I start any hardware work I require a deposit of up to 80% of the total estimate. I find that all the companies that I deal with don't have a problem with this and if they do you don't want to work for them in the first place anyway.
Just think of it like any other business you get progress payments as you go along but you have to lay this out at the beginning before you start any work for anyone. As this is normal business pratice most companies don't have a problem with it.
I hope that has been of some assistance to you, but from experience if they don't pay within the first 30 days you arn't likely ever to see the money as they are either going broke or are the type who just don't pay their bills. Either way you're up the creek without a paddle as it costs you more to take it to court than what it was originally worth in the first place, particuarly when you take into account your time that is wasted in all the court appearences where you could be out earning money instead of wasting your time as most times even a court order won't get any money out of these business.

8% annual interest applied monthly on a $1000 outstanding balance, for example, would add approximately $6.66 to the monthly bill. ($1000 * .08 = $80 and $80 / 12 = $6.66 or .08 / 12 = .0066 monthly.) Of course, due to the magic of compound interest, the next month, with an outstanding balance of $1006.66, the monthly interest would be $6.71, and on it goes, charging the same percentage each month, but on a slightly higher balance.

If you charged 8% each and every month (instead of 8% / 12) the annual interest rate would equate to 96%. Only Vito down the street charges that much. But if you did, again, due to the magic of compound interest, the original $1000 would double in only 9 months. If you tried to charge that much, Vito might pay you a visit to break your legs.

Your customers to pay their bills not actually make money off interest.

But having said I think you'll find that once an account has reached the 120 day period it is cheaper to kiss the money goodby rather than fight fot it as you'll end up spending more trying to recover the money than what it was originally worth {not to mention loosing a lot of work time as well [which is also costing you money.]}

A little encourgment in finding a way to make them want to pay goes a long way but it can only go so far as there are people/companies out there that just specalise in ripping other off by not paying their bills and they get someone else in after they have exhausted your "Good Will" Personally I'd go with progress payments for any labour for long term projects and demand a substantial deposit for any hardware related costs that you are going to incure in doing the job. The rest just might get around to paying you eventually but unless it is Government work there is a good chance that once the account has gone past the 120 day mark you havekissed your work & effort good by.

If if is Government work then they can take anything up to 18 months to pay and these jobs you can't charge interest on so you just have to sit there and bear it. I can remember long ago when I still did Governemt work that 23 months after ceasing all Government work we still had cheques comming in for work performed and once you are up and running it doesn't present a problem but you have to get to that stage first which is the hard part and once you stop you have a distorted picture of what your business is actually worth as the income isn't representive of the work being actually performed now or the payments recieved from current work.

The best bet is to put on the bottom of all invoices that an interesr rate of X% will be charged on all accounts over Y number of days and hope for the best. Unless there is a substantial amount involved it just isn't worth all the hassles and lost time in trying to obtain judgments against these outstanding accounts, you just don't supply any more services to these companies/indivules. While you might have a "Legal" right to seek relief from the Court System it just isn't worth the expence or waste of time not to mention that your Legal represintivies also expect to get paid no matter what transpires in the Court so even a Judgment there doesn't necessarly mean that you will get your money and even if you do it is very quickly chewed up in Legal Bills.

So the best advice that I could give is to chalk this up to a "Learning Experience" because you'll know better next time. If any job entails a substantial amount of time involved let it be known that you will require progress payments along the way and if these aren't forthcomming just stop the job and leave after all why work when you aren't getting paid? The same applies to any hardware get payment before you spend any of your money at least that way you won't be out of pocket if you don't get paid for the rest of the job.