Guides

Assess late payment fees

Manager can automatically assess late payment fees on overdue sales invoices. Late payment fees are set up when creating or editing a sales invoice in the Sales Invoices tab. Follow two simple steps:

Enter a due date

The Due date field is blank by default, but offers two choices, a fixed calendar date or net payment days:

OR

If no date is entered, Manager will assign the Invoice date as the Due date when you create the sales invoice.

Select a charging option and rate

By default, late payment fees are not charged. To assess them, check the Late payment fees box in the list of options. An auxiliary rate field will appear. Enter the percentage to be used for calculating the late fee:

48%20PM

Manager will now automatically calculate the late fee and add it to the sales invoice on the first day after the due date. If the sales invoice remains overdue, additional late payment fees will be added 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.

Example
On June 1st, 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, 1.5% of the total is added. The invoice can be sent to the customer again with a new balance due of 101.50. One month later, if the invoice remains unpaid, 1.5% of 101.50 (1.52) is added, for total late fees of 3.02:

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Where are late fees posted?

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.

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