Manager can automatically determine late payment fees on overdue sales invoices. You can also add, delete, or edit late payment fees manually.
Late payment fees are recorded in a separate tab, Late Payment Fees. For fees determined automatically, Manager will enable this tab when the first late payment fee is assessed. No action by the user is necessary.
If late payment fees will be added, deleted, or edited manually, but the tab is not yet enabled, click on Customize below the left navigation pane. Check the box for
Late payment fees. Then click Update:
Automatic determination of late payment fees is set up when creating or editing a sales invoice in the Sales Invoices tab. Follow three steps:
Due date field is blank by default, but offers two choices, a fixed calendar date or net payment days:
If no date is entered, Manager will assign the
Invoice date as the
Due date when you create the sales invoice.
By default, late payment fees are not charged. To determine them automatically, check the
Late payment fees box in the list of options. An auxiliary rate field will appear. Enter the percentage to be used for determining the late fee:
Manager will now automatically generate a notice that a late fee is due on the first day after the due date. If the sales invoice remains overdue, additional late payment fees will be determined on the same day of each following month until the invoice is paid in full. The fee is compounded by being calculated on the total balance due of the unpaid invoice, including any prior late fees.
If a late payment fee would become due on a day of the month that does not occur, such as the 31st of a 30-day month, Manager will determine the fee on the latest day that does occur. So, for example, a late fee due on October 31st will next be determined on November 30th. Subsequent fees will be determined December 30th and January 30th, then on February 28th (or 29th in leap years), March 28th, etc. This is done so one late payment fee falls in every calendar month.
When one or more sales invoices are eligible to be charged late payment fees, a notice appears when the Sales Invoices tab is entered:
Click on the yellow banner to see a list of sales invoices with pending late payment fees:
Click Create to assess the fee(s) for the first month of eligibility. If additional late payment fees are pending, the list of sales invoices and the notice will appear again. Repeat the process until all pending late payment fees have been assessed and the notice no longer appears. This repetitive approach is necessary because every monthly determination of late payment fees depends on the prior assessments.
If more than one sales invoice is shown, a late payment fee will be generated for each one every time you click Create.
On June 1, 2018, a sales invoice is raised for 100.00 with payment terms of net 30 days and a monthly late payment fee of 1.5%:
The day the invoice becomes overdue, the pending late payment fee notice appears. A late payment fee is assessed, and 1.5% of the total is added. The invoice is sent to the customer again with a new balance due of 101.50. One month later, the invoice remains unpaid, so another late payment fee is assessed, adding 1.5% of 101.50 (1.52), for total late fees of 3.02:
Late payment fees can be added, deleted, or edited manually in the Late Payment Fees tab.
Late payment fees can be added manually on any desired schedule (daily, weekly, etc.). To add a fee, click New Late Payment Fee:
Complete the form and click Create. On this form, fields appear sequentially as others are completed.
The sales invoice from the previous example continues to accrue late payment fees for eight months, accruing 12.65 in late fees. Eventually, the customer asks whether the invoice can be settled for 10.00 in total late fees if payment is made within 3 days. The business agrees on the condition that 20.00 will be assessed if payment is late again. A manual late payment fee is entered:
When a late payment fee is added manually, it will be shown on the sales invoice whether or not the
Late payment fees box is checked.
To delete a late payment fee, go to the Late Payment Fees tab and click Edit beside the fee to be deleted. Click the Delete button.
Because all the automatically determined late payment fees in the previous examples will be replaced by the agreed 10.00 fee, they are deleted as described above. (Note that Batch Delete can be used.) Only the manually entered late payment fee remains:
To edit a late payment fee, go to the Late Payment Fees tab and click Edit beside the relevant transaction. Modify any field and click Update.
The payment in the previous example is late. So the 10.00 late payment fee that was entered manually is edited to 20.00:
If the first late payment fee is manually entered, Manager will not determine or notify you of subsequent automatic late payment fees.
If a late payment fee is deleted after subsequent fees have been automatically determined and assessed, Manager will not redetermine the deleted fee. However, if the latest fee is deleted, Manager will redetermine it automatically and notify you it is pending.
Late fees are posted automatically to an uncategorized income account named Late payment fees. This account appears in your chart of accounts when the first late fee is assessed:
No action on your part is required unless you wish to rename the account or place it into an existing group. Both steps are accomplished by editing the account under Settings Chart of Accounts after it appears.