July 12, 2024

How to Apply Late Fees in QuickBooks Canada

Denym Bird
CEO of Paidnice

QuickBooks is a widely-used accounting software among Canadian businesses. However, many users are surprised to discover that QuickBooks Canada lacks a crucial feature: built-in late fee functionality. This article will explore how to overcome this limitation using Paidnice, an innovative solution for applying late fees and enhancing accounts receivable processes.

Charging Late Fees in Canada

Late fees play a vital role for Canadian businesses, encouraging prompt payments and maintaining healthy cash flow. However, it's essential to consider the legal aspects when implementing late fees in Canada.

In Canada, late fees must be reasonable and clearly communicated to clients beforehand. While there's no strict legal limit, it's generally advised to keep late fees below 60% annual interest to avoid being considered "criminal interest" under the Criminal Code. Most businesses typically charge between 1% to 2% per month on overdue balances. It's crucial to clearly state your late fee policy in your terms and conditions. Learn more about what you can charge legally in Canada here.

The Limitations of QuickBooks Canada vs QuickBooks USA

Unlike its US counterpart, QuickBooks Canada (along with versions for Australia, the United Kingdom, and other global markets) does not include a default late fee feature. This limitation can pose significant challenges for businesses trying to efficiently manage overdue payments and consistently apply late fees.

How Paidnice Can Add Late Fees to QuickBooks Canada

Paidnice is easy to use accounts receivable software that integrates seamlessly with QuickBooks Canada. It not only bridges the late fee gap but also offers additional features to streamline your receivables process:

  1. Set up custom late fee policies tailored to your business needs.
  2. Send automated email and SMS reminders to clients about upcoming or overdue payments.
  3. Regularly send account statements to clients without manual intervention.
  4. Ensure no invoice is overlooked with customizable follow-up processes via escalation workflows.

How to connect Paidnice with QuickBooks Canada

Follow these steps to start using Paidnice with QuickBooks Canada:

1. Sign Up and Connect

Create a Paidnice account and begin your 30-day free trial:

Connect QuickBooks Canada to Paidnice with a single click:

2. Set Up Late Fee Policy for QuickBooks (via Paidnice)

Choose your late fee type (percentage, flat fee, or a combination). Specify when the late fee should be applied (e.g., 14 days after the due date):

3. Configure Additional Features

  1. Set up payment reminders (e.g., 5 days before due, on due date, 10 days after).
  2. Schedule automated statement send-offs (e.g., monthly or quarterly).
  3. Create escalation workflows for consistently overdue invoices.

Putting it all together

QuickBooks Canada's lack of built-in late fee functionality can be a significant obstacle for businesses. Paidnice offers a comprehensive solution to this problem, allowing you to easily apply late fees and streamline your entire accounts receivable process.

Start using Paidnice today to efficiently manage late fees in QuickBooks Canada and improve your overall accounts receivable process. Learn more about Paidnice's late fee functionality in our help desk, or chat with our friendly team for a quick demo.

Denym Bird
CEO of Paidnice
Denym is a software entrepreneur and writes about accounts receivables management for small business.