Free AR resources / tool

Late Payment Interest Calculator

Calculate an illustrative late-payment interest amount from a balance, the number of overdue days and a monthly rate. It is useful for checking your internal figures before discussing an overdue account.

How to use this resource

Enter the outstanding invoice balance.
Set the number of days the invoice is overdue.
Enter the monthly interest rate stated in your agreement.
Review the calculated interest and total amount due before applying any charges.

How the interest is calculated

This tool estimates simple, non-compounding interest using: invoice balance × (monthly rate ÷ 100) × (days overdue ÷ 30).

It does not automatically apply statutory rates, grace periods, caps or compounding. Those rules differ by contract and jurisdiction.

When should you charge a late fee?

First check the agreed payment terms and any laws governing the invoice. A valid charge may also depend on proper notice and the kind of customer.

For many AR teams, a clear reminder and easy payment route are more effective starting points than an immediate fee.

Frequently asked questions

Does this tool determine the legal rate?

No. It only estimates a rate you supply. Check applicable law and the payment terms before adding interest.

Is the result compound interest?

No. The calculator uses simple interest on the original outstanding balance.

Does the calculation include weekends?

Yes. Days overdue means calendar days, unless your agreement specifies a different convention.

More resources

Open this page in a browser to use the interactive tool.