How to Charge Interest on a Small Business Debt

Late payments are a difficult issue for any small business/independent contractors/freelancers. A standard interest charge on amounts due from customers can act as an incentive for the customer to pay more promptly; in the absence of an interest charge, there is little penalty for customer to delay paying, as your business is essentially offering an interest-free loan out of your cash flow for the duration of their late payment. Determine how much and when to charge interest.

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