AccountantLate Payment Interest Calculator
Calculate accrued interest fees for overdue invoices and auto-generate standard payment demand letters.
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Calculation Settings
Typically 1% to 1.5% per month (12% to 18% annually).
Interest won't apply if paid within this period.
Days Overdue
0
Interest Accrued
$0.00
Total Balance Due
$0.00
Payment Demand Notice
Accrual Schedule / Ledger
| Period / Interval | Starting Balance | Interest Charged | Accumulated Balance |
|---|
Overdue Invoice Interest Policy
Charging interest on late invoice payments is a legal practice in the US to compensate for cash-flow delays. To do so, you must clearly specify the late interest policy in your initial contract agreement.
Mathematical Methods
Simple Interest: Calculated only on the base principal amount due:
Interest = Principal × (Annual Rate / 365) × Days Overdue
Compounding Interest: Accrues interest on previously accumulated interest fees:
Daily: Balance = Principal × (1 + Rate / 365)Days Overdue
Monthly: Balance = Principal × (1 + Rate / 12)Months Overdue
Monthly: Balance = Principal × (1 + Rate / 12)Months Overdue
US Interest Rate Caps (Usury Laws)
Be careful not to charge excessive interest. Most states enforce usury laws limiting maximum commercial late fees (often capping it between 10% to 18% per year unless a specific signed agreement overrides it).