Is there a max amount that you as a business can charge as a late fee?

Answer 1

You can not claim interest on late fees. But if you charge a finance fee which is more of what it is called a finance fee for one months credit for a month as a late fee you can claim interest on that and add it to the same debit as well. There are guide lines on amounts charged. If you really want to know what these limits are you can get a computer program or book like Business for dummies. I feel if you called a business as suggested above they would be happy to give you the wrong info so you would get fined and go out of business. Ask your accountant would be one of the best places to find out. He or she would as well be able to tell you where to find the info but they would know.

Don't trust your money to what someone on yahoo answers tells you. Go pay someone that knows.

Answer 2

Usually the maximum legal amount is determined on a state by state basis. You may want to check with your local Chamber of Commerce to see what is allowed in your state. Also, if you're going to charge a late fee, it's typically referred to as a "finance charge", based on a certain percentage of the monthly balance. You need to be clear to your customers that a finance charge can be assessed for late payment-most businesses have it written right on their invoices.

Answer 3

By law there is an acceptable rate, usually following the market for setting interest and fees. The best practice is to call another business and piontedly ask them and set yours accordingly. Typically fees and interest are aligned with credit cards or bank loans; depends on type of credit extended, etc.
If you go too high then your debtor has recourse in court should it come to that.