> For the complete documentation index, see [llms.txt](https://learn.withessential.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://learn.withessential.com/revenue/invoices/automatic-late-fees-on-overdue-invoices.md).

# Automatic late fees on overdue invoices

When your business has automatic late fees turned on, Essential adds a late fee to an invoice that stays unpaid past its due date, once, and includes it in the balance due. This page covers what the fee is, where it shows, how payments apply to it, and how to exempt an invoice, a customer, or a property — or waive a fee that has already been added.

## Before you start

* Late fees are turned on in **Settings → Invoicing → Payments**, in the **Late Fees** card, with a percentage and a number of days past due. See [Set up automatic late fees](/administration/settings/set-up-automatic-late-fees.md). Until they're on, nothing on this page appears in the app.
* Waiving a fee that has already been added needs permission to edit invoices (the same permission as recording a payment).

## What a late fee is and when it's added

Each night, Essential looks for invoices that are more than your **Days past due** past their due date (the invoice date plus its payment terms) and still have a balance. Each eligible invoice is charged **once**: the fee is your percentage of the invoice's remaining balance, including its sales tax and net of any partial payments. An invoice that stays sent is never charged a second time, however long it goes unpaid. The one way a late fee can be added again is if you revert the invoice to Draft and send it again (see [Late fees after you revert an invoice and send it again](#late-fees-after-you-revert-an-invoice-and-send-it-again)). Processing fees on earlier payments are never part of the base, and an invoice that is already paid or written off is never charged.

The fee is a separate, dated adjustment on top of the invoice. The invoice's own items, discounts, and tax stay exactly as sent, so the invoice stays locked and nothing about it needs to be re-sent. Each assessment is recorded on the invoice timeline.

Late fees are never added to Stripe-managed subscription invoices; Stripe manages those invoices on the subscription schedule. They are also never added retroactively: an invoice that was already more than **Days past due** overdue when your business turned late fees on is left alone, unless you later revert it to Draft and send it again (see [Late fees after you revert an invoice and send it again](#late-fees-after-you-revert-an-invoice-and-send-it-again)).

## Where the fee shows

* **The invoice page.** The **Payment Summary** card lists **Invoice total**, **Late fee (assessed )**, any **Amount Paid**, and **Balance due**. The card appears as soon as a fee exists, even before any payment.
* **The customer's pay page.** The header shows **Invoice total**, **Late fee (assessed )**, and **Balance Due**, and the **Pay Invoice** window's **Invoice summary** lists the fee under the invoice amount. The customer pays the full balance including the fee; the page never shows your internal reasons.
* **The invoice PDF** the customer downloads or receives lists the fee and the balance due with it.
* **Balance due everywhere** — the Invoices page, the customer and property pages, the aging report, saved-card charges, and autopay — includes the fee.

In aging reports, the unpaid original amount ages from its due date, and the unpaid late fee ages from the date it was assessed.

## How payments apply

Payments settle the original invoice amount first and the late fee last. A partial payment smaller than the invoice total leaves the whole fee outstanding; the fee is collected only once the invoice total is covered. An invoice is Paid when both are settled.

## Exempt one invoice from late fees

Use this on a Draft invoice you know should never be charged a late fee — for example a disputed invoice or negotiated terms.

1. Open the invoice (it must be a Draft to change it).
2. Below Attachments, expand **Additional options**.
3. Next to **Late fees**, click the pencil. The row shows your standard policy, for example "5% after 30 days past due".
4. Choose **Exempt this invoice from late fees**. Optionally add a **Reason** — an internal note (up to 500 characters) your team sees on the invoice. The customer never sees it.
5. Click **Save** in the dialog, then save the invoice.

While the invoice is exempt, the **Late fees** row reads **Exempt from late fees** with a **No late fees** badge, and the collapsed **Additional options** row reads "No late fees" (with anything else set, for example "2 discounts · No late fees"). **Additional options** opens automatically whenever the invoice is exempt. To charge the standard fee again, open the same dialog, choose **Charge the standard late fee**, and save the dialog and the invoice.

> **Where to find it:** On the open invoice, expand **Additional options** (below Attachments), then click the pencil next to **Late fees**

## Exempt every invoice of a customer or property

1. On the customer page (or the property page), expand **Billing** and edit Customer Billing or Property Billing.
2. Under **Billing options**, check **Do not charge late fees**.
3. Save.

New invoices for that customer or property then start exempt. The **Late Fees** dialog on a new invoice tells you where its default came from ("Default from property billing", "Default from customer billing", or "Standard policy"), and you can still charge or exempt any single invoice there. The same precedence as payment terms applies: a property with its own Property Billing uses only that setting; a property on Customer Billing follows the customer. Changing this setting never changes invoices that already exist.

## Waive a late fee that has already been added

If a fee was assessed and you decide not to collect it, waive it from the invoice page:

1. Open the invoice. In the **Payment Summary** card, under the **Late fee** line, click **Waive late fee**.
2. Enter a **Reason** (required, up to 500 characters; internal only).
3. Click **Waive late fee**.

If a payment is still in progress, wait for it to finish or cancel it before waiving the fee.

The unpaid part of the fee is removed from the balance due right away, the card shows **Late fee waived** with the date and your reason, and the invoice timeline records who waived it. Only the unpaid part can be waived: if the customer has already paid some or all of the fee, that part stays collected (see [Refunds: what the app can and can't do](/revenue/invoices/refunds-what-the-app-can-and-cant-do.md) if it needs to go back). A fee that has been fully paid can't be waived, and the button isn't offered.

If a payment that covered part of a late fee is later marked unpaid, that part of the fee is owed again and goes back into the balance due. It stays on the invoice, including when you revert the invoice to Draft (the **Revert to Draft** confirmation tells you how much stays), and no new late fee is added on top of it.

Waiving a fee doesn't exempt the invoice from anything else — but because an invoice is charged only once while it stays sent, no new late fee is added to it afterward.

## Late fees after you revert an invoice and send it again

Reverting a sent invoice to Draft removes an unpaid late fee: the **Revert to Draft** confirmation names the amount before you commit, and the **Payment Summary** card then shows the fee as waived with the reason **Invoice reverted to draft**.

The same confirmation asks what a late fee should count from once you send the invoice again, under **Late fees after you send it again**:

* **Count from the new send date** (selected by default). Payment terms start over on the day you send the invoice again. A late fee is added only if the invoice then goes more than your **Days past due** past that new due date. Use this when you corrected the invoice and the customer should get the full time to pay.
* **Count from the original invoice date**. The invoice date and due date stay as they are. If the invoice is already more than your **Days past due** overdue when you send it again, the late fee is added again within a day, calculated on the balance of the corrected invoice. Use this when the customer was already late and the change doesn't excuse that.

The invoice date and due date printed on the invoice don't change with either choice; only the date late fees count from does. So with **Count from the new send date**, an invoice that is past its printed due date still shows as Overdue, but it isn't charged a late fee until it is late by the new dates. If you want the invoice itself to show a new due date, change its **Invoice date** while it's in Draft: late fees follow the invoice's own dates, and a late fee never applies before the due date the invoice shows.

While the invoice is in Draft, the **Late fees** row under **Additional options** shows which one you picked, and the invoice timeline records it as **Late fees after re-send**. To send the invoice again with no late fee at all, exempt it there instead (see [Exempt one invoice from late fees](#exempt-one-invoice-from-late-fees)).

You get the same question when you reopen a voided invoice with **Revert to Draft**. The question doesn't appear when late fees are turned off, the invoice is exempt, or part of an earlier late fee is still owed (see [Waive a late fee that has already been added](#waive-a-late-fee-that-has-already-been-added)). In that case reverting still removes an unpaid late fee, and an invoice that has its late fee removed this way doesn't get a new one after you send it again. An invoice that has never had a late fee is different: reverting changes nothing about late fees for it, so it is treated like any other invoice from then on. For example, if you turn late fees on later and the invoice then goes more than your **Days past due** past its due date, a late fee is added.

See [Void an invoice, and reopening a voided one](/revenue/invoices/void-an-invoice-and-reopening-a-voided-one.md).

## Turning late fees off later

Turning the setting off in Settings stops future assessments. Fees already added stay on their invoices until they're paid or waived. An exemption on an invoice, customer, or property is always honored, whether or not late fees are on at the moment.

## Accounting

Each assessed fee posts to the **Late Fee Income** account (under Revenue in **Settings → Accounting**) when it's assessed on an accrual-basis invoice, or when it's collected on a cash-basis invoice. Waiving an unpaid fee posts the exact reverse. See [What syncs to QuickBooks](/reporting-and-integrations/accounting/what-syncs-to-quickbooks.md).

## Related guides

* [Set up automatic late fees](/administration/settings/set-up-automatic-late-fees.md)
* [Set payment terms and the due date on an invoice](/revenue/invoices/set-payment-terms-and-the-due-date-on-an-invoice.md)
* [Record a payment on an invoice](/revenue/invoices/record-a-payment-on-an-invoice.md)
* [How your customer pays an invoice online](/revenue/invoices/how-your-customer-pays-an-invoice-online.md)
* [Waive processing fees on an invoice](/revenue/invoices/waive-processing-fees-on-an-invoice.md)
* [Why can't I edit an invoice?](/revenue/invoices/why-cant-i-edit-an-invoice.md)
* [Set customer billing (payment terms, tax exempt, autopay)](/customers-and-work/customers/set-a-customers-billing-profile-payment-terms-tax-exempt-autopay.md)
* [Use Customer Billing or set Property Billing](/customers-and-work/properties/property-billing-profile-the-customer-default-or-its-own.md)


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