Understanding Late Payment Fees
Late payment fees are charges applied to an invoice when a customer fails to pay by the due date. These fees compensate for the delay and encourage timely payments in the future.
Here is how to create and send your late payment fee invoice to your customers.
⚠️ IMPORTANT: Before getting started, make sure you have mentioned your late payment fee policy in your terms and conditions and that it is also showing on your invoices. You will not be legally able to charge the fee otherwise.
Create a New Invoice for the late payment fee
- Send a Reminder: Before sending the late payment fee invoice, you might want to send a reminder for the original invoice. You can do this manually or set up automatic reminders in Zervant. More information about that here: Creating payment reminders.
- Determine the late fee: Before creating the invoice, decide on the late payment fee amount. This could be a fixed fee or a percentage of the original invoice.
- Create a New Invoice: In Zervant, go to the Invoices tab and create a New invoice.
- Invoice Details: Title the invoice clearly, for example, "Late Payment Fee for Invoice #XXX". Ensure to reference the original invoice number for clarity in the message field.
- Enter the Fee Amount: Add a product line with the late payment fee as the amount, and approve the invoice. The product type for the fee is "services".
- Premium Plan Features: Remember, some features, like payment reminders, are part of Zervant’s Premium subscription.
- Online Payments: Activate online payments to make it easier for your customers to settle their dues, including late payment fees.
Adding late payment fees in Zervant is straightforward. It not only helps maintain a healthy cash flow but also ensures your business policies are respected. Always communicate clearly and professionally with your customers regarding any additional fees.