Unpaid invoices are never fun to deal with, but they occur more frequently than you might like. Do some of your invoices remain unpaid even after two or three reminders? If that’s the case, you can undertake some steps. One of those is to add interest and late fees to the invoice.
Set up interest and late fees
You can set a standard percentage for interest and late fees, as well as a minimum late fee. To do this, navigate to Settings and choose ‘Company info’. Click the pencil to edit the info of your department. In the following popup, choose ‘Filling out your company’s info’.
At the bottom, under Payment information, click ‘Advanced options’. You’ll get three extra fields to set up your interest and (minimum) late fee.
The additional invoice costs will be calculated based on these values. How to do so, you’ll learn in our next step.
Charging interest and late fees
To charge these fees you have to start with an overdue invoice.
In our example this is definitely the case: meanwhile, invoice 2015/32 is 241 days overdue. Even after three reminders, the invoiced amount remains unpaid. It’s about time to start charging interest and late fees.
To do so, click on the ‘Incasso’ button on the detail page of the invoice. This button will only become clickable if the invoice is actually overdue. We’ll see a popup in which we can add the interest and late fees.
Our late fee is already filled in. If the amount based on the percentage you have set is lower than the minimum fee, the latter will be charged by default. If the late fee surpasses the minimal fee, the amount will be based on the percentage you have set in the settings. Of course, you can always adjust manually.
If we want to charge the interest as well, an extra amount will be charged, also based on the percentage you’ve set earlier. The percentage is calculated on an annual basis: the longer your invoice remains unpaid, the higher the fee.
If you click ‘Save’, you’ll see that the interest and late fee will be added to the invoice. Make sure the customer gets them by sending another reminder.
If you’re using automatic reminders when sending invoices, you’re also able to add the interest and late fees automatically. To do so, navigate to Settings > Invoices and pick ‘Automatic reminders’.
When editing or creating a new reminder, you’ll see the option to charge these fees. Just choose after how many days you want to send the reminder, plus the template you want to use, and you won’t have to worry about it again.
Remove interest and late fees
If you would change your mind and you want to delete these fees from the invoice, it’s easily done. Go back to the detail page of the invoice and click ‘Incasso’ again. Just deactivate the interest and remove the late fee. Click ‘Save’ and you’ll see those two fees disappear from the invoice.
Influence on bookkeeping
In reality, interest and late fees are often not paid by the customer. Mostly, they merely act as an extra persuasion to pay the original amount of the invoice. That is why Teamleader does not include these fees in the export to bookkeeping software. Otherwise you have the possibility to book a higher amount in your bookkeeping than you’ve actually received. If your customer does pay those fees, you’ll have to add them manually to your bookkeeping.
Customer support service by UserEcho