How Late Fees Turned Into A Profit Center

Cash Flow Conversations with Fexingo: Working Capital, Receivables, and Small Business Finance · Sep 25, 2026 · 10m · transcript

Most small business owners view late fees as a necessary evil or an afterthought. But one regional plumbing supply distributor, Waterline Distribution, turned its overdue receivables into a predictable revenue stream by restructuring how it communicates penalties. Instead of hiding fees in fine print, they implemented a tiered escalation system that reduced their days sales outstanding from forty-two to thirty-one days while increasing net income by eight percent. Lucas and Luna break down the psychology behind why transparent, escalating friction works better than punitive surprise charges…