Self-Employment Late Pay: Can Small Businesses Charge Interest On Late Payments?

Self-Employment Late Pay: Can Small Businesses Charge Interest On Late Payments?

EITHERne ray of light that comes from the COVID-19 pandemic, in the USA and abroad, it is the change in work culture that is prevalent among many younger professionals. For example, people have begun to realize that traveling to the office five times a week is not key to increasing productivity with working from home, now synonymous with corporate culture.

Similarly, those who are classified as millennials and part of GenZ have realized that they can have more fulfilling careers outside of the traditional corporate sphere with many college graduates now more likely to start their own companies.

The last couple of years have also seen a boom in the gig economy with many people preferring to work independently with various clients rather than limit themselves to a particular job.

With many people now running their own businesses, billing has taken on greater importance, especially given the tax breaks associated with owning and starting a small business or sole proprietorship.

What is an invoice?

In simple terms, an invoice is a document provided by the seller to the buyer to collect payment for goods or services rendered.

How long can it take to pay the bill?

Typically, the invoice for a single transaction is settled immediately after a service is rendered; however, recurring transaction payment cycles may occur in a 30, 60, or 90 day period.

What happens if a payment is late?

In most cases, there is an agreement between the seller and the buyer regarding the time frame in which a payment must be settled.

If a buyer delayed payment for the good or service beyond what was previously agreed, then the seller is entitled to charge a late payment fee.

Can a seller charge interest for late payments?

Yes, a seller can also charge interest on any payment that is late, as long as both parties have agreed to this prior to the transaction.

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