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Rules about late fees and interest on overdue invoice charges Late fees are flat charges applied once an invoice becomes overdue For example, if a client misses a 30-day payment deadline, a business might charge a $25 penalty Interest is a percentage-based charge applied to the overdue balance
Charging Interest and Late Fees on Unpaid Invoices An interest fee is additional money you charge a client over and above the original invoice amount if they pay late The interest rate is a percentage of the unpaid balance that accumulates every month the invoice remains unpaid
Invoice late fee wording: How to charge late fees - Wise Clear late fee wording maintains a professional appearance, avoids confusion, and can prevent offending any customers It can also help you get paid faster This guide will cover: Late fee wording, how to charge late fees, if you should charge them, and what rate to charge
Best Practices for Charging Late Fees on Invoices A percentage-based approach, commonly ranging from 1 5% to 3% monthly, aligns the fee with the invoice’s value, providing proportionality A flat fee offers simplicity, while a percentage model better reflects the cost of delayed payments, particularly on larger invoices