Turn on automatic late fees in QuickBooks Online

Learn how to set up and apply late fees to overdue invoices automatically in QuickBooks Online.

When your customers don’t pay on time, you can automatically add late fees to the overdue invoice instead of doing it manually. This way you can set a standard late fee in advance without applying them on a case-by-case basis. 

QuickBooks only calculates and applies late fees to overdue invoices the day after you turn on the late fee setting. To  manually apply late fees on older invoices, add them as a line item.

Important: There may be limits on the amount and type of fees you may charge your customers. You should confirm the requirements in your jurisdiction and how they relate to you.

For a better experience, open this article in QuickBooks Online. Launch side-by-side view .

Turn on late fees

Turn on late fees and assign a default fee amount in your QuickBooks Online settings. 

1. Go to Settings ⚙, then select Account and settings (Take me there).
2. Select Sales, then, in the Late fees, select Edit ✎.
3. Turn on the Default charge applied to overdue invoices switch.
4. Enter the Amount and/or Percent (%) of the fee.
5. Select the Frequency dropdown, then choose how often you charge customers.
6. (Optional) If you want to give them a grace period, select how many days to give them from the dropdown.
7. (Optional) Edit the default name Late fee.

Select Save.Note: You need to turn on invoice reminders or send one manually to tell the customer they’ve incurred late fees. Otherwise, they won’t know to pay them.

Change your automatic late fee settings

If you change the automatic late fee settings later, all new late fees added to invoices use the new settings. However, fees applied to older overdue invoices remain the same.

If you make any custom line items for late fees, you can change them like any other product or service, including the account that they are charged to.

Related links

• Understand automatic late fees in QuickBooks Online
• Add product and service items to QuickBooks Online
• Charge customers different automatic late fees in QuickBooks Online
• Send invoice reminders automatically or manually in QuickBooks Online