Sometimes customers pay late which can add to your costs of managing that late payment (administrative costs etc…) so automating the late fee process is quite useful. Be careful though, too high a fee could result in the customer refusing to pay and leave for a competitor.
Step 1: Enabling the late fee
- Login your admin area and navigate to: Setup -> Automation Settings
- Under “Billing Settings” find the field “Add Late Fee Days” – This is the number of days after the due date to apply the late fee. It is recommended you set this at the same days that accounts get suspended (Which is recommended to be around 7)
- Scroll down & click “Save Changes”
Step 2: Setting the late fee value
- Login your admin area and navigate to: Setup -> General Settings and click on the “Invoices” tab
- Scroll down until you find the field “Late Fee Type”, select this to either be a percentage or a fixed amount
- Now look for the field “Late Fee Amount”, if you set this value to 10 and the Late Fee Type to percentage that would add a late fee of 10% – if you select fixed amount and the late fee amount of 10 that would add $10 as the late fee, a big difference.
- Scroll down to “Late Fee Minimum” – It is recommended you keep this low (Around $1 – $1.50) though if adding a fixed amount (“Late Fee Type” you can just insert that same value here)
Once you have set the late fee values scroll down to the bottom of the page and click “Save Changes”