How are late fees calculated?

[ffeingol]

Hello,

 

We've never used the late fee option in WHMCS but we would like to start using it. I'm assuming the percent that you put in is the monthly rate (i.e. we can charge at most 18% per year so that is 1.5% per month).

 

Here is how I think late fee's "should" work, but I'd like to know if this is how they really work. For purposes of this example everything bills on the 1st.

 

Invoice #1 due 12/1/2008 $100.00

 

Invoicing now runs on 1/1/2009 and invoice #1 is unpaid. I would think invoice #2 should be:

 

Invoice #2 due 1/1/2009 $100.00, late fee (from invoice #1) $1.50 (1.5% of the $100).

 

Invoicing now runs on 2/1/2009 and invoice #1 and #2 is unpaid. I would think invoice #3 should be:

 

Invoice #3 due 2/1/200 $100.00, late fee (from invoice #1 and #2) $3.00 (1.5% of the $200 past due).

 

is this the way that it really works?

[scurrell]

The late fee is added to the overdue unpaid invoice, not subsequent non-overdue invoices.

[ffeingol]

So in other words it does not work? If an invoice is 3 months past due there should be multiple late fees.

[DataHosts]

Who has invoices that are 3 months late? To me that is more of a worry than a late fee being tacked on. JMO

[ffeingol]

Your thinking hosting. These are other services we provide.

 

I'm just trying to find out if late fees will be applied to an invoice each month until the invoice is paid.

[SilverNodashi]

No, late fees are applied only once. If you need it to apply it for every month that an invoice is due, then you'll have to post feature request.

[AxlF]

As I understand, late fees are only chraged on recurring invoices. For all other individual invoices no late fees are charged... (What is the sense behind this decision?!)

 

There are countries where a 3 or 4 grade dunning process is normal.

Now we need to charge late fees in an extra invoice... thats bad at all...

[easyhosting]

I operate in the UK and this is how we have our fee/invoice structure based and so far this has worked, we tried the percentage route, but this did not have any effect as you state on an overdue invoice you will get 1.50 extra, this is nothing and therefore will not have any effect, but if you use a fixed fee of 15.00 this will have a better effect on them to pay the invoices.

 

Invoice/Fee Structure

 

 

14 days before due date Invoice generated and sent

2 days before due date Invoice reminder sent

1 day after due date First overdue reminder sent

5 days after due date Second overdue reminder sent (inc. £15 late fee)

7 days after due date Third overdue reminder sent + letter before action (fee charged £12.50)

14 days after due date Claim process begins

[AxlF]

 

14 days before due date Invoice generated and sent

2 days before due date Invoice reminder sent

1 day after due date First overdue reminder sent

5 days after due date Second overdue reminder sent (inc. £15 late fee)

7 days after due date Third overdue reminder sent + letter before action (fee charged £12.50)

14 days after due date Claim process begins

 

Do you add the late fees manually or does this whmcs automatically?

 

Does this affect non recurring invoices? (e.g. for Webdesigns, or similar)?

[easyhosting]

The late fee is added automatically to all invoices WHMCS creates at the second overdue reminder, the only thing I have to add manually is the letter before action fee on the third overdue invoice.

[AxlF]

to all invoices

 

Does it really apply to all invoices or only the recurring.

 

If I bill a customer for a single task (e.g. a new webdesign), no late fees are added to that invoice...

[easyhosting]

If you have the "Payment Reminder Emails Tick to activate overdue subscription reminders and invoice payment reminders" ticked in the configuration>automation setting, then the late fee will apply to all invoices sent by WHMCS

[ffeingol]

We do much more than web hosting, so it has to be a percent or we'd have to manually process the past due's (which we don't want to do). These are large corporate clients who pay, but always pay 90+ days late.

[easyhosting]

It is up to individual companies if they use percentage or fixed late fees, oone thing though no matter how large a business my clients are i would not stand for them always paying 90+ days late, this is bad business practice

[Patty]

I'd like to see a combination of percentage + flat fee. Here in Brazil it's commom practice to charge 2% per month fee + a daily percentage fee for utilities and other services. But in case the account is suspended we also need to add to that the set up fee to reinstate it. So it would be nice to be able to have a combination of both percentage + flat fee.

 

Would it be possible to do and if yes, maybe it could be implemented on a future version??

[easyhosting]

this would be advantageous.

 

request this in the feature request area

[dmc_ss]

Does the addition of a late fee change the invoice number or does it remain the same?

[TDub]

Old thread, but worthy discussion still, I think. We use a flat fee for late charges. But since it's the same fee regardless of invoice amount past due, for some this is excessive and others it isn't nearly enough.

 

For example, someone paying hosting of $10/mo who gets a $15 late charge...that's quite a hefty charge. But $15 late fee on a $350 invoice is not really anything, especially if they continue to carry it out longer.

 

Obviously you try not to let these accounts get that past due, but as mentioned previously, services other than hosting for bigger companies can often be late due to their billing cycles and we'd prefer to hang onto them, even if they're a little late.

 

Point being, a more flexible late fee system would be appreciated. Fixed fee plus percentage seems reasonable to me. That way you can set your fixed fee to zero if you just want to use a percentage, or do both if you choose.

 

But then there's also the matter of late fees over time. Personally, an invoice that continually doesn't get paid should accrue more late fees...like X percent per day until some maximum (either time or amount). Regardless, a simple one time late fee just doesn't seem enough for those who are continuously late, especially if the fixed fee isn't tailored to the amount of the invoice due.

 

My 2 cents.

[vchosting]

I would like to see a monthly fee added for each overdue month

[vchosting]

Also I would like to see this where the late fee can be altered dependant on length of tme

 

1month = 2% fee

2months = 3% fee

3months = 5% fee

[easyhosting]

Also I would like to see this where the late fee can be altered dependant on length of tme

 

1month = 2% fee

2months = 3% fee

3months = 5% fee

 

I find my process works 100%

 

14 days before due date Invoice generated and sent

2 days before due date Invoice reminder sent

1 day after due date First overdue reminder sent

5 days after due date Second overdue reminder sent (inc. £15 late fee)

7 days after due date Third overdue reminder sent + letter before action (fee charged £12.50)

14 days after due date Claim process begins

 

I have a client paying £8.50 a month, he was always late and i even changed his recurring invoice due to to help him but he was still late, but always paid before the 7th day, one month this remained unpaid until the day before the following months invoice was dut to be sent and after an LBA was sent, so his £8.50 invoice was now over £30. he paid this and guess what he has never been late since, so this works.