Let’s say you find yourself needing to send an updated invoice that includes a late fee for your client because they didn’t pay on time. This should include a copy of the original invoice, as well as an updated invoice showing the newly added late fees. Use an invoice due date calculator to ensure that you list the correct due date on the invoice to avoid any miscommunication.Īfter a client’s payment becomes past due, you will need to send follow-up communication informing them of their new payment terms. ![]() Even something as simple as a brief line that says, “You will be charged a 1.5% late fee for overdue payments,” can help ensure prompt payment. Including a reminder of the late fee terms on your initial invoice can also be helpful. Adding this information to your contract and invoice terms and conditions will help you avoid disputes later on. You should set expectations when you first start working with a client by making them aware of your payment terms and late fee policy. Good communication is key to successfully charging late fees on invoices. How To Charge Late Fees On InvoicesĬollecting unpaid invoices can be a major pain, so the way you go about charging and communicating late fees on invoices can make a big difference in ensuring timely payments and maintaining a healthy business partnership without adding tension. If they fail to make their payment within 30 days - even if they make it on day 31 - they’ll be charged a late fee. If payment comes after the due date, it is considered late, and the extra fee applies.įor example, with Net 30 payment terms, a client will have 30 days from when the invoice was issued or received to pay their balance in full. A professional invoice will list a payment due date and payment terms so the customer knows when they need to submit payment. Late fees are commonly included on professional invoices. What Are Late Fees?īefore working out how to charge late fees on invoices, it’s imperative to understand what encompasses late fees.Ī late fee is an additional charge made to clients when they don’t submit on-time payment for an invoice. Charging late fees can help limit potential cash flow issues - but you need to go about it the right way. To prevent having to do so, many businesses add late fees on invoices to encourage their clients to submit payment on time. ![]() ![]() If you find your business in this situation, you don’t want to waste too much time chasing down clients for payment. When a client doesn’t submit payment by their invoice due date, it can create serious cash flow problems for your business. All too often, businesses struggle with slow-paying customers.
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