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Umikflow

Late Payment Fee Calculator

Calculate the exact interest and late fees to charge clients for overdue invoices.

Standard is usually 1.5% to 2% per month (18%-24% annually).

Fee Breakdown

Original Invoice:$5000.00
Accrued Late Fee:+ $73.97
New Total Due$5073.97
Generate updated invoice

How to handle late payment fees

Adding a late payment fee to an overdue invoice is a common business practice, but it must be handled correctly to be legally enforceable and maintain good client relationships.

1. It must be in your contract

You cannot legally add arbitrary late fees if they were not agreed upon before the work started. Ensure your contract or initial proposal clearly states something like: "Invoices unpaid past 30 days will accrue a late fee of 1.5% per month."

2. Check local laws

Many regions have caps on the maximum amount of interest you can charge on commercial debts. In many US states, the limit is often between 10% and 18% annually (0.83% to 1.5% monthly).

3. Automate your reminders

The best way to handle late fees is to never need them. Using a tool like Umikflow to send automated WhatsApp and email reminders right before the invoice is due can drastically reduce late payments.