Hit $25,000 in unpaid invoices from small clients, and that number finally made me fix my contracts
I run a small design shop out of Portland and I finally added up what I was owed in February. It came to $25,000 across 9 clients, and 6 of them were just net 30 invoices I never followed up on. Most were in the $800 to $3,000 range, so no single one felt worth chasing, which is exactly how it piled up. I talked to a business lawyer near me and she said the biggest mistake small shops make is no late fee clause and no clear payment terms. We redid my contract template so every project now has a 1.5 percent monthly late fee and a deposit that covers the first two weeks. Wondering if anyone here has actually collected on late fees, or do clients just ignore them?
Laughed at the part where you said no single one felt worth chasing, because that is exactly how every small shop ends up with a pile of unpaid invoices and a bad attitude. In my experience the late fee works more as a scare tactic than an actual money maker, since most clients pay the second they see it on the next invoice. The ones who don't pay it were never going to pay on time anyway, so the fee just gives you a clean reason to stop working for them. Your mileage may vary, but a good deposit does way more heavy lifting than the 1.5 percent ever will.