Calculate interest charges and late fees on overdue invoices. Supports monthly rates, annual rates, and flat fees, so you know exactly what your clients owe.
Calculate interest and penalties on overdue invoices
Late fees can incentivize on-time payment, but they're not always the right approach. Here's when they make sense.
Late fee terms must be in your contract or invoice before work begins. Springing fees on clients after the fact is unprofessional and often unenforceable.
1-2% per month is standard. Anything above 2% per month may violate usury laws in your state. Check local regulations before setting your rate.
Most late payments are accidental. The client simply forgot. Automated reminders (especially SMS with 98% open rate) resolve most cases before fees apply.
Apply late fees consistently for repeat offenders, but consider waiving them for first-time or otherwise reliable clients. Relationships matter.
A 5-7 day grace period after the due date shows good faith and gives clients with slow payment processing time to settle up.
Automated reminders prevent late payments. Late fees punish them after the fact. The best strategy uses both, but reminders do the heavy lifting.
Need help with the wording? Check out our invoice reminder email templates for professional follow-up messages at every stage. Or calculate your collection efficiency with our DSO calculator.
ChaseBot sends automated SMS + email reminders before invoices go overdue, so you rarely need to calculate late fees at all.
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