Where are late fees?
rtisdale
Member Posts: 2
See title. Automated late fees are a pretty fundamental feature of a invoicing/billing application.
This has been brought up before and it still hasn't been implemented.
When will this be in the application? It's a major oversight
4
Comments
Hi, @rtisdale,
There are currently no feature in Wave to automatically handle late fees. You can modify your invoices after they've been sent to add a fee like this. The invoice link in email sent to your client will even update automatically to match.
Could you tell us a bit more about your own needs in regards to late fees? What industry do you work in? Do you often find yourself having to charge a late fee to your client? What's the fee structure you use for those fees? The more information you can give us, the best we'll be able to understand your needs and assess the kind of impact that a feature like this one would have on our users.
Howdy @Alexia. I know it's not there but it seems a major oversight by the development and project management team.
I'm in Information Technology (Consulting and implementation) but I don't think the field is particularly relevant here.
Not often but when I do it's almost never a pleasurable experience due to how the client responds and due to the fact it's a time consuming and error prone process (Because there is no automation)
Directly from my contract
elapsed outside the period defined in the section named “TERMS”.
Any balance past due is subject to an additional 2.5% fee as applied
to the remaining balance, compounded each net term. The fee may
be applied toward the balance of future work as long as this clause is
not abused. The Client will be responsible for any costs associated
with collecting amounts due to the Consultant.
In English: On the day of the late payment you will have a 2.5% fee applied. Every 15 days (My net term) you will have 2.5% late fee compounded until payment it made.
I imagine many people use a similar percentage based structure.
This is an easy feature to implement
Is the invoice overdue? Apply X% fee.
Continue to apply they fee each net term (Or a variable term) until the invoice is paid.
**Here is why I think it's an issue: **
The client sees I manually add a late fee (even if it's stated in my contract) and they feel unhappy. A human applied the late fee. A human they will blame and be angry with.
Automated late fees seem to take away some of that friction (as well as save time and reduce errors).
A person doesn't manually apply the late fee, it's simply applied automatically by the software (As outlined in my contract) if the invoice remains unpaid by the client.
Thank you for taking the time to answer my questions so completely, @rtisdale! This is incredibly helpful. I'll pass your comments along to our product team.
Yes! Please add this feature. It would make it so much easier to assess a late fee and prompt timely payments.
I conduct a choir, and give the option for monthly payments.
This looks to be helpful:
"Once you know what the maximum annual interest rate you can charge is, work out the monthly finance charge. Just divide the state’s max. by 12. For example, if the rate is 18%, the monthly finance charge is 1.5% (18/12). On a $5000 invoice that is 30 days late, a penalty of $75 ($5000×0.015) applies.
Let’s also assume that the payment is 15 days late. It becomes a little different. Then you can calculate the charge by dividing 15/365, multiplying by 18%, and then by the total on the invoice. It gives you roughly $37."
It would be lovely to have automatic options. I would charge 1%.
Hey @Zelda. Appreciate the feedback that you've given us here. We still don't have any immediate plans/timetable as to when this would be available to our users, but it could be something that we implement in the future.
In the absence of a "late" fee, are there any other ways to adjust a price based on a date?
@MrMike Not automatically! Just getting creative here...a workaround could be to add a note on the invoice letting your customer know that there will be late fee applied to their next invoice if they don't pay the present invoice on time. In order to create your own late fee, you can head to Sales > Products and Services, add a new 'Late Fee' product so you can then add it as a line item on a future invoice.
Thank you for the suggestion.
This would be a great feature. Especially if we can set a % or hard value to include after day 14 etc. Currently there is no more automated communication after the 14 day that I have noticed.
Can you advise. With your suggestions to "create your own late fee, you can head to Sales > Products and Services, add a new 'Late Fee' product so you can then add it as a line item on a future invoice." if the late fee is for example 2.5 % of the sale and every 15 days a 2.5 % late fee will be compounded. What would be the most efficient way to change the late fee amount to fit the sale?
Hi @Chelsey . You'd have to add the 2.5% manually every 15 days. Because the invoice can be edited at anytime, it will automatically display the new amount in the invoice when your customer reopens it. You can also always add an additional 2.5% fee on top of the previous, or just change the product to display 5%, whatever you think works best for you.
@AlexL the whole point of using a tool like Wave is to avoid manually emailing invoices and creating them from scratch.
Seriously though, this would be incredibly valuable for my business because I don't have the time to go in manually and add fees manually to each invoice on a regular basis. And if I had a bookkeeper to do the work I wouldn't need Wave to help me keep it all together.
I do not bill monthly or on a regular basis most of the time, so I would have to be in the system several times a month to do this for each individual invoice which would be a pain. Even a basic set of rules or options on this would be relatively simple to implement.
Example:
x% interest charges after y days of not being paid. Let the customer pick those variables or have a preset selection of options to keep it simple like you do with payment terms now (net 30, etc.)
The plus side: Wave gets a bump (admittedly small, but a bump nonetheless) in revenue too if someone pays a late payment with the interest accrued via a card or bank payment. Not all product suggestions have revenue potential for you guys as a business but this one has at least some positive impact.
I'd like to reiterate all of the above comments. Having a built in late fee feature would be immensely useful, and honestly something that most other accounting services offer.
As someone else in this thread pointed out, when you manually add in that fee, it gives the clients that are late on payments the ability to push back. When it's built in and an automatic feature it makes it easier to say "not possible to change, that's how much you owe me."
Please make this a priority to add as a feature to your product.
Hey @RobynE. Thanks for your input and offering your context as far as the impact this feature would have on your business. @schwinn160, that suggestion as far as the revenue bump as well is something to consider for sure! We do not have plans to include this feature on the platform in the near future, but your input does not go unnoticed, so we thank you for that!
HI,
Will this work for recurring invoices as well?
Hey @Angel_Jones , no updates on this feature at the moment.
I completely agree. Many people have this in their contracts but it's difficult to enforce because the process of applying late fees is manual and takes up more time than it's worth. Having a late fee automatically applied will help your users to recover money faster and dissuade their clients from dragging their heels. I see Freshbooks has this and it's very easy to add. The only thing they don't have is revised totals that jump incrementally depending on how late the payment is.
Hi
I like that they have added the customer statements feature, however, I'd like an option for interest charges. Say I have a policy on late payments charged at n% per month on the outstanding balance and would like to send a statement that includes that. How do I do that at present?
Please advise, thanks.
Hey @iExtol! I've merged your comment into a little more relevant thread here - unfortunately late fees and interest rates are not something that are currently possible to do manually in Wave. If you'd like to add a late fee to your invoice, you'd need to calculate that percentage, and then add it as a line item to your invoice. I'm sorry for the inconvenience!
I am astonished at how this is still not a feature. Every invoicing system has one.
I am also confused as to how editing the invoice helps at all, are you suggesting to create a single line item for every time there is a late fee? In my case, there are a lot of late fees, but that's besides the point. If you want to show the late fee you'd have to put the quantity as 0.015 (for 1.5% which is what we charge every month) and then the previous total on the price. This shows how the calculation is being made for the client to not feel they're being ripped off.
However, if there is a second month of late payment, then you'd have to create another line. Or modify the fee line, which then becomes a mathematical headache.
I've just been charging late fees separately, but that is NOT the way this should work. Many times (because its cents) I end up just forgiving them because it's not worth the time to create the edits.