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New: Automatic late payment fees for invoicing

UPDATE June 4th/13: Customers will no longer have to go to the Add-on store to add late payment fees to their account. Now, when you click “set default terms when editing an invoice” you’ll see s new light box with separate tabs for default terms and late payment fees. This is available to all paid FreshBooks accounts.
late payment fees - invoice - freshbooks

Ever want to automatically add a late fee to your FreshBooks invoice? Automatic Late Payment Fees are now available in FreshBooks. This works by adding a percentage or flat fee to unpaid invoices after certain amount of days from the invoice date. Also, if you have clients that should not be charged late fees, you can toggle this on or off for specific clients.

Late Payment Fees may not be for all users. In some industries, they are not the norm. Also, according to a FreshBooks study on Invoice Payment Terms, adding late payments fees to invoices will help ensure payment, but may slow your payment.

Turning on your Late Payment Fees

If Late Payment Fees will improve your cash-flow, they are simple to turn on in the Add-on Store. To turn on your Late Payment Fees:

  1. Go to the Add-on Store (top right corner) in your account
  2. Scroll to the bottom of the the store (take a look around as well)
  3. Click “Purchase” at the bottom of the Add-on
  4. A pop-up will appear and click “Buy Now”. Don’t worry though, it’s free!

Late Payment Fees are now active in your account.

Add late payments fees to your invoices

To use them, create a new invoice, or edit an old one from the “Invoices” tab.

  1. Scroll to the bottom of your invoice
  2. Click on the “Set Default Terms” link above the Payment Terms field
  3. A pop-up will appear. Click on “Enable Late Payment Fees for all invoices” below your default terms
late payment fees FreshBooks - Add-on Store

You’ll now see the different options for your Late Payment Fees.

  1. Select either “Percentage of invoice value” or “Flat fee”
  2. Then enter in the number of days you want to wait until the fees are added to the invoice into “Deadline”
  3. Next, enter in the percent of the invoice or flat fee you want charge into “Fee Amount”
  4. Select the sales taxes you are required to collect for the extra fee
  5. [Percentage of invoice value only] Check off “apply fee every … days” if you want to charge a percentage fee on a recurring basis.
  6. Click “Save”
FreshBooks - Late payment fees - invoice

Based on your Late Payment Fees, the invoices for all your clients will have an extra charge added based on your choices. This will apply to all newly created invoices, as well as existing invoices that become ‘Late’ after the feature is activated. This will not apply to older invoices that are already late.

Turning off Late Payment Fees for specific clients

If you do not want certain clients to be charged Late Payment Fees, you can turn them off.

  1. Open an invoice (click “edit” to the right of the invoice) for that client
  2. [Or] select them in the “Clients” tab and click “Edit Client”
  3. Underneath the “Client” or “Organization Name”, click “Late Fees”
  4. Deselect the check-box for “Charge Late Payment Fees”
  5. Click “Save”
late payment fees FreshBooks client name

Now, that client will not be charged Late Payments Fees on past and future invoices. You can always turn this back on for that client.

Please leave a review of the late payment fees Add-on in the FreshBooks Add-on directory.


  • Albeirta

    Invoicing always takes time and we tend to forget doing such important task due to some busy schedules and financial problem. However failing to comply with the deadline will surely make a bad record on the payer side even if we still make it up to pay but the fact that we have lapse the given term for payment, it will certainly be making a big discrepancy on our side.

  • http://illusio.com Chuck Spidell

    What time of the day are the late fees applied?


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