A flat fee plus monthly interest
Most late-payment terms combine a one-time flat fee for being late at all with a monthly interest rate charged on the balance. The page adds them and prints the total now owed, with the flat fee and the interest broken out separately so you can see which part of the charge is which.
Interest accrues pro rata by day, not in whole months: the chargeable days are the days late minus the grace days, the month count is that number divided by thirty, and interest is the invoice amount times the monthly rate times that fraction. A $5,000 invoice at 1.5% a month is $75 for thirty chargeable days, $37.50 for fifteen and $7.50 for three.
Chargeable days also gate the flat fee. Inside the grace window nothing is charged at all - not interest and not the fee - and the table note says no charge has started. Zero days late returns a single warning, because an invoice that is not overdue owes nothing.
Interest is the number that keeps climbing
A 1.5% monthly rate is 18% a year, so a stubbornly late invoice quietly accrues real money the longer it sits. The flat fee is the visible one-time cost; the interest is the line that keeps climbing, and it climbs in proportion to the delay rather than stepping up at the start of each month.
This is why the page shows the same invoice at 60 and 90 days. One month of delay looks small, but a quarter-late invoice has already stacked three months of interest on top of the flat fee - and the extra rows are computed with the same grace days, so the comparison stays honest.
The interest is simple, not compounding. Nothing charges interest on unpaid interest, which is why the 90-day figure is exactly three times the 30-day interest on the same invoice. A contract that compounded would produce a bigger number than the one printed here.
The fee's real job is behavior
A late fee is less about the revenue and more about making on-time payment the cheaper, easier habit. When the term exists, clients who would have drifted now pay on time because paying late costs more, and a clear, predictable fee changes behavior even when it is rarely enforced.
That is also the argument for keeping the fee legible: a flat amount plus a stated monthly rate is easy to explain on an invoice and hard to argue with later. A penalty that appears only after a dispute tends to sour the relationship instead of shaping the payment.
If a client is chronically late even with a fee, the honest fix is usually a shorter term, a deposit or payment up front - not a bigger penalty. The page prices the fee you set; it cannot tell you whether the relationship is worth the collection effort.
The 60- and 90-day view keeps the cost honest
The invoice amount you enter is the balance the interest runs on. There is no deposit or partial-payment field on this page, so if part of the bill has already been paid, enter what is still outstanding - charging interest on the original total is the mistake the model avoids by taking your balance as given.
The fee itself is not always collectible. Many jurisdictions cap late-payment interest, and a charge has to be stated in the contract or the invoice terms before it can be enforced; what the paperwork does not say, you usually cannot collect. The page runs no legal check and makes no allowance for a statutory cap.
Not modeled: compounding, statutory late-payment regimes such as prompt-payment acts, and state-specific interest ceilings. The rate is your input, and the arithmetic is the whole of what runs here.
What a contract can charge and what a court will enforce
A late fee has two separate lives. In the contract it is whatever both sides signed; in front of a judge it is a number that has to survive two tests - was it stated before the invoice went out, and is it a reasonable estimate of the cost of being paid late rather than a penalty in disguise? That is why the page prices interest on the balance still owed and not on the original total: charging interest on money you have already received is the fastest way to turn a defensible clause into a penalty. A deposit or a partial payment should lower the charge, and the interest row is where that shows up.
The arithmetic is deliberately simple, and the simplicity is what makes it enforceable. Interest accrues by day, past the grace window, with no compounding - a 90-day invoice pays exactly three times the 30-day interest - and the flat fee starts only once the grace days have run out. Some jurisdictions cap late-payment interest well below 18% a year, and an invoice that states 1.5% a month without the contract saying so usually collects nothing. The page prints the annualised rate beside the monthly one so that gap is visible before a client points it out.
Danfio