--- title: "Automate Late Fees & Interest for Xero & QuickBooks - Paidnice" description: "Late fee software for Xero and QuickBooks. Paidnice adds late fees and interest to overdue invoices automatically, with grace periods and UK statutory interest." url: https://www.paidnice.com/late-fees --- ★★★★★160+This app is a game changer!Lesley B. # Automatically add late fees and interest to your invoices Late fee software for Xero and QuickBooks. Paidnice charges the fee or the interest on the day your terms say, **posts it to your ledger and tells the customer.** Try it FreeBook a Demo 2025WINNER2026WINNERXero App of the Year2025 Global · 2026 NZ Read all 160+ reviews ## Trusted with over $1,200,000,000 collected on time across 1,070,000 invoices since 2022. and counting ## Late fees and interest, applied on the day your terms say Set the rule once. Paidnice calculates each charge from your Xero or QuickBooks invoices and applies it at the right time, for every customer group. ### Set the charge once, and it applies itself Choose a fixed fee, a percentage or interest a year, then a grace period. Paidnice adds each charge as its own fee invoice or as a line on the overdue invoice, and can repeat it every set number of days while the invoice stays unpaid. ### One policy, applied to every invoice that meets it Paidnice drafts the late charges ahead of the run date, alongside your reminders and statements. On the day it checks each invoice again, drops any that were paid, and applies the rest. ### A fee per invoice, or one interest charge a month Charge a fee on each overdue invoice, or statement interest once a month: one invoice with an interest line for every overdue invoice and the days it was late. Or run both. ### UK statutory interest and compensation For UK customers, Paidnice charges statutory interest at the Bank of England base rate plus your percentage, locked for each six-month period or following changes. The £40, £70 or £100 statutory compensation goes on as its own line. ### A late fee is a real invoice in your ledger Each charge is saved as Draft or Approved in Xero or QuickBooks. Once approved, it reaches your customer’s accounts payable like any other invoice, shows on statements and ages in your receivables until it is paid. ### Grace periods, promises and disputes Nothing is charged until the grace period ends. Switch on skip when promised or skip while a query is open and the fee waits, and any charge can be waived. ## What customers say about automated late fees > “Before Paidnice, we didn't really enforce late fees on invoices because it was an administrative nightmare. Now it's fully automated and our invoices get paid faster.” > > **Andreas L.** Xero App Store > “I've recovered more in interest for the year than my subscription fee, and most importantly my clients are now better at paying on time!” > > **Ryan M.** Xero App Store > “First round of late penalties and everyone magically paid their bill.” > > **Ismael A.** Xero App Store [Read all 160+ reviews →](https://paidnicereviews.com) ## Every late fee setting in one place The settings below come from the late fee policy in Paidnice. Each customer group can run its own policy. | Setting | What you choose | | --- | --- | | Charge type | **Invoice late fee** for each overdue invoice, **statement interest** for the whole overdue balance, or both | | Amount | A fixed amount, a percentage, or interest a year prorated by the day | | Repeat | Charge again every set number of days while the invoice stays unpaid | | When it starts | A grace period in days overdue, so nothing is charged the moment an invoice slips | | Compounding | Include previous interest charges, on by default. Turn it off for simple interest | | Credit on the account | The charge is calculated on the net balance when the customer has credit | | UK statutory interest | Bank of England base rate plus your percentage, locked each six months or following changes, with £40, £70 and £100 compensation | | Who it applies to | Customer groups, contact tags, invoice reference, tracking category or class, country and a minimum fee | | How it posts | A new fee invoice or a line on the overdue invoice, Draft or Approved, with its own description, income account and tax rate | | When it waits | Optional per policy: skip when a payment is promised or a query is open. A frozen invoice or contact gets no policies | Step-by-step guides:Add late fees in Xero →Add late fees in QuickBooks → ## Your accounting system will not do this for you Xero has no automatic late fees. QuickBooks Online only adds the fee to the existing invoice, with no email to the customer. ### Xero and QuickBooks on their own - **Late fee on overdue invoices**Xero: none. QuickBooks Online: added to the existing invoice only - **Customer told about the charge**QuickBooks Online adds the line with no email - **Interest a year, prorated by the day**Xero: none. QuickBooks Online: none - **UK statutory interest**Not available ### With Paidnice - **Late fee on overdue invoices**Applied automatically in Xero and QuickBooks, as a new invoice or on the invoice - **Customer told about the charge**Email notice to the customer, on or off per policy - **Interest a year, prorated by the day**Calculated on the overdue balance for each customer - **UK statutory interest**Base rate plus your percentage, with fixed compensation > It’s the debt collection system I’ve been looking for, for the last 15 years. Tyler Caskey Partner, The Bean Counters Said on the Accounting Apps Podcast 2025WINNER2026WINNER Xero App of the Year2025 Global · 2026 NZ 2026FINALIST Innovation App of the YearGlobal finalist 2026 ## Everything you expect from great accounts receivable software Paidnice has everything your business needs to run a best-in-class receivables process, from the first reminder to the money landing in your account. ### Chase automatically Send Reminders Automate email and SMS with powerful reminders, from your own domain. Automate Statements Schedule automatic statement sends each month. AI Reply Handling Paidnice reads every reply and drafts the next step for your approval. ### Enforce your terms Late Fees & Interest Automatically apply and send late fees and interest. Prompt Payment Discounts Encourage early payment with automated discounts. Escalate, Make & Track Calls Escalate and assign overdue invoices for manual follow up. ### Get paid, and see it coming Customer Payment Portal Self-service hub for your customers' payment and billing needs. Create Payment Plans Flexible payment terms with automatic installment reminders. AR Insights & Reports Measure Days Sales Outstanding and other critical KPIs. [See all features →](https://www.paidnice.com/features) Real Estate (Co-working)South Africa ## 75% fewer late payments within 30 days > “Before Paidnice, over 25% of our payments were late, which we were manually chasing up. With Paidnice automating this for us, that has dropped to less than 5%.” Louis FourieDirector, Venture Workspace Read Venture Workspace’s story → Late paymentsBeforeOver 25% paid lateNow75% fewer within 30 daysEnforcementBeforeManagers started every late fee manuallyNowAutomatic fees and interestThe relationshipBeforeAwkward conversationsNowNo offense taken ## Works with the software you already run Paidnice connects to your ledger, payment providers, CRM and team chat, **so every invoice is chased, paid and recorded without manual data entry.** See all integrations → NewConnect to Claude or ChatGPT via MCP Claude ChatGPT ## Late fee questions What is late fee software? Late fee software calculates, applies and announces the late fee on each overdue invoice. Paidnice reads your Xero or QuickBooks invoices, waits out your grace period, adds the charge to the ledger and can email the customer. Can I apply late fees to invoices that are already overdue? Yes. Charges can be applied in bulk to the invoices that are overdue today, as well as to invoices that go overdue from now on. Can I charge different customers different rates? Yes. Late fee policies sit on customer groups, so each group runs its own rule. A tag excludes one customer without moving them out of their group. Can a late fee repeat each month? Yes. Switch on Repeat late fee and choose how often, such as every 30 days. Paidnice charges again each time the invoice is still unpaid, and stops when it is paid. How do I remove a late fee? Waive or credit the charge in Paidnice. To stop future charges for one customer or one invoice, use a tag or the invoice reference filter, and every other reminder carries on. Freezing an invoice or a contact stops every policy on it, reminders included. What happens if a customer does not pay the late fee? The charge is on the ledger, so it ages like any other receivable. It shows on statements and follows the same reminder and escalation rules as the original invoice. How are late fees recorded in QuickBooks and Xero? Each charge posts to the income account you choose, with its own description and tax rate. You choose if it saves as Draft or Approved. Can I charge statutory interest in the UK? Yes. Paidnice applies the Bank of England base rate plus your percentage, locked for each six-month period or following the rate as it changes, and adds the £40, £70 or £100 fixed compensation as its own line item. [See how the base rate updates](https://www.paidnice.com/blog/auto-update-bank-of-england-interest-rate). Do late fee invoices count toward my plan? No. Your plan counts the new invoices you create each month. Late fee invoices that Paidnice raises are not counted. [See pricing](https://www.paidnice.com/pricing). ## Meet the team that built Paidnice Book a call with the founders to learn more about how Paidnice can help you take the pain away from getting paid. Book a CallChat with us Great hands on experience. Ashley helped us through everything.Janet X.App Marketplace160+I’ve contacted support a few times, and Denym has always replied with really detailed and thoughtful explanations, even taking the time to jump on a video call to help.Jon M.App Marketplace160+So happy with the service provided by Ashley at Paidnice. The best service I have had from anyone in years.Anna H.App Marketplace160+Very simple to set up and the few questions we had were quickly and expertly dealt with by Denym. It has already made a huge difference to our debtor days and has massively helped.Jenny M.App Marketplace160+ ## Related features Prompt payment discountsAn early payment discount that expires on its own.EscalationsGive a call, a credit stop or a letter to the right person.Credit control for multiple entitiesEach company in a UK group chases in its own name. ## Start charging late fees automatically Connect Xero or QuickBooks and Paidnice prepares draft policies for you. Nothing runs until you approve them. Try it FreeBook a Demo [Rated 5 stars, 160+ reviews](https://www.paidnice.com/reviews) · [App of the Year](https://www.paidnice.com/blog/winner-xero-global-app-awards-2026)