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I started adding a 3% 'on-time' discount to my invoices last month and the first three clients who paid early were all ones I thought would drag their feet.
It turns out the small carrot of saving $45 on a $1500 job got them to process the payment through their accounting system within 10 days, which taught me that a tiny incentive works better than a late fee threat for my regular commercial accounts.
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murphy.nancy7mo ago
Totally agree with what @mason_murray8 said about the bad feeling of a late fee. It reminds me of my old dentist's office, which had this tiny discount if you paid your part right after the appointment. It was maybe five bucks, but I always scrambled to write the check just to feel like I beat the system a little. They got their money fast, and I left feeling clever instead of annoyed by a bill in the mail later.
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robert4837mo ago
Ever try the opposite and just charge a small "processing fee" for late payments? I did that for a while and it just made people mad, even though it was basically the same money. Switched to a tiny early pay discount like you're doing and it worked way better. It's exactly what @mason_murray8 said, people want to feel smart for getting a deal, not punished. That good feeling gets your invoice to the top of their pile. Now I just build that small discount into my price from the start and frame it that way. Clients feel like they're winning, and I get paid faster without the hassle.
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mason_murray87mo ago
Yeah, that's smart. People love feeling like they got a deal, even a small one. It's way better than the bad feeling of a late fee.
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