Guide Categories
Late Payment Fees
Manage and apply late payment fees to overdue customer invoices.
Overview
Late payment fees help encourage timely payment of invoices and compensate for the cost of carrying overdue accounts. These fees can be applied automatically or manually to invoices that remain unpaid past their due date.
Note
Late payment fees should be clearly stated in your terms and conditions and comply with local regulations regarding maximum allowable rates.
Applying Late Payment Fees
To apply late payment fees:
- Navigate to the Late Payment Fees tab
- Review overdue invoices eligible for fees
- Select invoices to apply fees to
- Choose fee type (fixed amount or percentage)
- Enter fee amounts or percentages
- Add fee descriptions and references
- Apply the late payment fees
Fee Types
Fixed Amount Fees
A set dollar amount applied regardless of invoice value
Percentage Fees
A percentage of the outstanding invoice amount
Daily Interest
Compound interest calculated daily on overdue amounts
Key Information Fields
| Field | Description |
|---|---|
| Invoice | The overdue invoice being charged |
| Customer | Customer owing the overdue amount |
| Days Overdue | Number of days past the due date |
| Outstanding Amount | Amount still owed on the invoice |
| Fee Rate | Percentage or fixed amount being charged |
| Fee Amount | Total late payment fee calculated |
Best Practices
- Clearly communicate late payment terms before invoicing
- Apply fees consistently to maintain fairness
- Consider grace periods for good customers
- Monitor fee effectiveness in improving payment times
- Keep detailed records for dispute resolution
- Consider offering early payment discounts as an alternative
- Review and update fee policies regularly
Warning
Ensure your late payment fee policies comply with local laws and regulations, as some jurisdictions limit the types and amounts of fees that can be charged.