Looking for how to add late fees to your invoices in Xero?
Latechaser is an app syncs into Xero that will enable you to charge late fees to your customers when invoices go overdue.
How does Latechaser work? (Diagram)
Latechaser issues late fees to your customers once their invoices go overdue. Either via a fixed late fee (eg $10), or via a fixed percentage of the total invoice (eg 2.9% of $100).
The late fee can be applied to the existing invoice, or issued separately as a new invoice.
How you apply the late fee will be unique to your accounting setup. But for the best customer experience, and to ensure you get paid quicker. We recommend adding the late fees to your existing invoice.
Step-by-step guide to adding interest to add late fees to unpaid invoices in Xero
Step 1: Sign in with Xero
> Select Get Early Access button on latechaser.com
> Select which Xero organisation you would like to sign in with, and to connect to Latechaser.
Note: If you would like demo Latechaser with demo data, use the Xero Demo Store.
> You'll now be logged into Latechaser and on the dashboard.
Step 2: Setup your penalty settings
> Move across to the Settings tab
> Select the Policies tab
> Setup your Policy settings
Here you can create a penalty policy that you apply to your customers when their
invoices go overdue.
Late fee issue type
Depending on your accounting setup, Latechaser will either issue a new invoice for the penalty/late fee or update the existing invoice in Xero.
Invoice see calculation type
Pick from a fixed late fee (eg $10), or an percentage amount (eg 2.9% of $100) of the total invoice amount.
Xero account to use for penalties
Which chart of account would you like to code your late fees into.
Important: You need to select an account before Latechaser can work.
Use contacts tax rate (only activate for custom tax setups)
Override the Xero account above to the contacts one if you have one setup for account's receivable.
The number of days from when the invoice goes overdue, to when the late fee is issued. We recommend giving yourself some time to factor in reconciling your accounts here.
Repeat late fees when left unpaid
Select to enable compounding of late fees by any set number of days you pick. For example, repeat the 2.9% interest charge after 30 days (to compound interest charge monthly)
Pick what fee you would like to charge, either a fixed amount, eg $10, or a fixed percentage, eg 2.9%
Customise the text that will appear on the invoice line item.
> Your policy settings will save automatically. You have now setup your first policy. Next we need to apply this to your default group.
Step 3: Apply policy to a group
> Select the Group tab
> Select the Group tab, and select the Assign a policy button.
Note: The Default Group will send your policy to all of your customers, future and existing. If you want to create a Whitelist (of customers that don't get late fees) add those customers to the Whitelist group, and don't assign any policies to it.
> Hover over your policy and select it
> Success, you've now added your policy to your group.
Step 3: Activate your account
To turn everything on, we must first activate the account.
> Select the General (1) tab, and make sure Active (2) is selected in the example below:
Success! You have now setup Latechaser. When Active, Latechaser will automatically import new invoices, and will check these invoices against your group and penalty criteria you set above.
Note: To stop Latechaser processing overdue invoices, turn the slider off (2).
Step 4: Sync existing invoices (Optional)
If you would like to sync your existing invoices across to your new late fee settings. You'll need to sync your existing invoices across into Latechaser.
> Select the Dashboard (1), and inside the Dashboard select Sync Invoices (2)
The sync process takes a few minutes, after which you can select Refresh to see which invoices have been imported and it should look a little like something below:
If you need any help getting your account setup, or have any questions - send us a note on email@example.com