Do you charge customers late fees or similar service/finance charges? If so, you’ll need to record these transactions so they are included in your business’s total annual revenue. Assuming you use Quickbooks, you can simply create an invoice for late fees, at which point it will automatically be recorded. For more information on how to add late fees in Quickbooks, keep reading.
Create a New Invoice
There are two ways to record a late fee in Quickbooks: You can either create a new invoice for the late fee or add the late fee to an existing invoice. For the former option, log in to Quickbooks and click the (+) button, followed by “Invoice” under the “Customers” menu. From here, you can complete the fields for the new invoice. In the “Product/Service” menu, click “finance/service charge or late fee.” You can then enter the total amount for the late fee, followed by “Save and Close” to complete the process.
Use an Existing Invoice
Alternatively, you can attach a late fee to an existing invoice. This is done by logging in to Quickbooks and choosing “Sales,” followed by “Customers.” You should then be able to choose the customer to whom you want to charge a late fee. After choosing the appropriate customer, you’ll need to select an existing invoice.
For the “Product/Service” menu, choose “finance/service charge or late fee” followed by “Add new.” Next, complete all the required fields, including the amount of the late fee. Like with the first method, you’ll need to choose “Save and Close” to complete the process.
The Bottom Line on Late Fees
Not all businesses charge their customers late fees. If you require payment immediately — when the customer receives the product or service — you probably won’t use late fees. But if you allow customers to pay after their product has been delivered or their service has been finished, you may need to use late fees as an incentive for customers to pay.
In Quickbooks, you can record late fees by either creating a new invoice for the fee or attaching the fee to an existing invoice. Either option will allow you to easily track the late fee so that it’s reflected in your business’s revenue.
Keep in mind that Quickbooks Online allows you to set up automatic late fees. With automatic late fees, customers will automatically be charged a specific amount if they don’t pay their invoice by a specific date.
Did this tutorial work for you? Let us know in the comments section below!