Invoice Late Fee Calculator

How this calculation works

Two ways to compute late fees: Simple monthly interest (most common in service businesses): - Late fee = invoice amount x rate% x (days / 30) - Example: $2,400 x 1.5% x (30/30) = $36 Daily compound interest (used in commercial contracts, more aggressive): - Late fee = invoice x (1 + rate%/30)^days - invoice - Example: $2,400 x (1 + 0.0005)^30 - $2,400 = ~$36.27 (1¢ more in the first month, big difference at 90+ days) The "Annual late fee revenue" line projects what you'd add to revenue if you charged late fees consistently across all overdue invoices in your book. Most service businesses with $15-30K annually in overdue invoices generate $300-900/year in late fee revenue at 1.5%/month - a small but real margin lift, more importantly it accelerates payment. Note on legality: most US states cap consumer late fees (typical: 1.5-2% per month, or ~18-24% APR). Commercial contracts have wider latitude. Always disclose the late fee rate on the invoice itself or in your service agreement BEFORE the invoice is sent. Calling a customer to add a late fee surprise is unenforceable.