Indeed. The response to breach of contract has no place in a contract. Breach of contract is explicitly an event outside the bounds of a contract. Defining penalties within the contract attempts to place those events and outcomes within the terms of the contract, and can grant the other party leverage to avoid legal remedies.
However, some terms can help encourage payment on schedule. Early payment discounts encourage inexperienced AP to pay early. Late payment penalties signal highly strategized AP as to when the cost of not paying will intersect with their retained time value of money. If the person paying the bills is directly related to an owner, then despite whatever is in the contract it's usually a matter of figuring out how to help them do their job.
This sounds like a case of AP putting off payment because someone knows about time value of money and doesn't view their relationship with the vendor as having value they can lose. Establish due diligence to collect first, then: A letter written by an attorney to their legal team is cheap and usually an effective nudge. Asking a court to compell payment consumes little time and is not expensive, despite their latency courts are impatient and want you to not burn hundreds of legal hours over this. Selling the invoice to collections is a thing, it's not so large a sum to make that hard. But most of all, hire a competent trained accountant who has zero relationship to anyone with equity, and listen to them.
However, some terms can help encourage payment on schedule. Early payment discounts encourage inexperienced AP to pay early. Late payment penalties signal highly strategized AP as to when the cost of not paying will intersect with their retained time value of money. If the person paying the bills is directly related to an owner, then despite whatever is in the contract it's usually a matter of figuring out how to help them do their job.
This sounds like a case of AP putting off payment because someone knows about time value of money and doesn't view their relationship with the vendor as having value they can lose. Establish due diligence to collect first, then: A letter written by an attorney to their legal team is cheap and usually an effective nudge. Asking a court to compell payment consumes little time and is not expensive, despite their latency courts are impatient and want you to not burn hundreds of legal hours over this. Selling the invoice to collections is a thing, it's not so large a sum to make that hard. But most of all, hire a competent trained accountant who has zero relationship to anyone with equity, and listen to them.