Just a quick note for those of you charging a % for late fees. You have to be really careful what you charge because if you go over the legal limit for the state in which you are doing business the amount could be considered usury and will be disallowed should it ever go to court.

I've seen a couple people mention 10%/month. That is WAY over the limit. Most states cap it around 20+%/year. In this case, you need to either:

1 - change it to a flat fee that you're charging (not a %)
2 - say you'll charge XX% for the first 2 months then send to collections
3 - stay within the legal limits by changing it to: late accounts will accumulate interest at a rate of 24%/year or 2%/month.
4 - combine a late fee with an interest rate. i.e. $35 late fee + 2% interest.

Just something to think about because it could potentially cause problems with your contract.