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mtworsham
September 1, 2022
Question

How do late fees work when using QBO for billing when you use deposits

  • September 1, 2022
  • 1 reply
  • 0 views

Hello All - 

 

I am working on setting up invoicing for a client that uses QBO. They are a painting company that charges a 50 percent deposit at time of contract signing, then collects the remainder once the job is complete.  They also charge 1 percent late fee per month, once the job is done, if the invoice isn't paid within 30 days of completion. 

 

Since a client might deposit weeks or days before their job is going to start/be completed how does QBO handle the application of late fees?

 

Should we set the due date of the invoice to the approximate completion date of the job?  

 

Or does the late fee clock not start running until the invoice is sent out for final payment?

 

Thanks in advance,

 

Todd

1 reply

A
Archie_B
September 1, 2022

Congratulations on your first post here in the Community, mtworsham. I'll share some information and guide you in setting up automatic late fees to overdue invoices in QuickBooks Online.

 

QuickBooks will calculate the late fee and automatically apply it to your overdue invoices as a line item once you set the fee amount and when to apply it to the invoices. But it only calculates and applies late fees to past-due invoices the day after you enable the late fee setting.

 

We can enable and set up default late fee settings to apply late fees to your customer's overdue invoices.

 

Here's how:

 

  1. Go to the Gear ⚙ icon at the  upper-right, then Account and settings.
  2. Tap on Sales, then, in the Late fees, hit Edit ✎.
  3. Turn on the Default charge applied to overdue invoices switch.
  4. Choose from the three types of fees:
    Flat rate: Applies a specified amount.
    Percentage of remaining balance: Applies a percentage of the remaining amount of the invoice.
    Flat rate and percentage of the remaining balance: Applies a one-time specified amount, plus a percentage of the remaining amount of the invoice. To use this option, select Percentage of remaining balance, then the Apply an upfront, one-time flat fee checkbox.
  5. Put the Amount and/or Percent (%) of the fee.
  6. Pick the Frequency.
  7. Select the number of days for the grace period and change the default name of the late fee. (These are optional)
  8. Click on Save.

 

You can visit this article for more details in managing and setting up a personalized late fee: Apply late fees to overdue invoices automatically in QuickBooks Online.

 

I'm also adding this link to learn how you can send invoice reminders automatically or manually in QuickBooks Online. 

 

I'll be available if you require any additional assistance or have any questions about late fees. Have a wonderful day!

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