My contract stats :

LATE PAYMENT FEE

$10.00 per day (including weekends) that payment is not received. Therefore, if the fee is not paid by 5:30pm on Friday, a late fee of $10.00/day will be due with your payment. Continued late payments will result in termination of our agreement. Your child may NOT attend daycare until your fees are paid, unless arrangements have been made in writing. You still have to pay for the days your child misses due to non-payment in order to hold your spot.
This helps to prevent Most people from paying late. It also gives you extra money, if they don't pay on time. Your bills wont wait to be paid why should you wait.
my contract also stats:
We agree that if we end up in court over money or any other reasons (payment for services, reimbursement cost etc. ) all court fees are our responsibility and not that of Valerie's Home Daycare (Valerie XXXXX) or any members of her family or staff. We are also responsible to cover any and all wages lost to Valerie XXXXXXX, any of her family member an any and all staff who have had to miss work do to going to court for any reason. We will also pay for any staff required to cover the daycare for days Valerie XXXXXX has to attend court or meet with her layer. We are aware that if any payments of fees or reimbursements are not made Valerie's Home Daycare can have a collections Agency collect the money on Valerie XXXXXXX's behalf.
unless the courts over turn this, it helps scare clients into paying on time, this way they don't have to pay all this extra money, or have to deal with a collection agency, which will reflect on their credit.
And yes all my clients have read and sign my contract. I have them do this in front of me. No one has questioned these policies.