Late Fee Issue

I am running version 19.1.15 and noticed with our first round of late fees, it is calculating late fees on paid invoices.

Here is our situation:

Invoices went out January 1 and were due on January 15. On January 16, the system gave me the warning at the top saying I have new late fees that need to be assessed, we assessed all of them and resent invoices. Some customers we decided not to enforce them as payment arrived the very next day.

I deleted the late payment fee then posted the receipt against the invoice the same way we always have by viewing the invoice and clicking “New Receipt”. Now I noticed there is another warning saying I have late payments that need to be assessed, and it is only referring to those two invoices.

I believe I can to into each one and also uncheck the box removing the calculation on the invoice, but that is an extra step as now to remove the late fee, we have to go to the late fees tab and remove it, and go to the invoice and uncheck the box, otherwise it will apply late fees to already paid invoices.

That is correct. So far as Manager knows, based on what you entered for the sales invoice, you want to charge late fees. You may have decided not to enforce them, but you did not tell that to the program. Since you deleted the posting of the late payment fees, it correctly interprets the current state of affairs as if the fee is due.

I understand all of that. I am simply bringing up that this is now a multi step process, when before the new implementation of late fees it was a simple check box. It would be better handled by only applying a late payment fee to invoices with balances. I cannot fathom any logical circumstances where a late payment fee would be applied to an invoice that is already paid in full.

Yes, but that was necessary to enable other features for late fees. And the extra steps are the result of your decision to forgive fees after the fact. It might not make sense to you. But as far as the program knows, (1) the invoice was not paid on time, (2) a condition of the invoice was the imposition of late fees on the day after the due date, and (3) late fees were not cancelled. Therefore, the late fees are still due because of the customer’s lateness.

Look at the situation this way: if you decided to forgive the late fees, you could open the sales invoice and uncheck the box. That is one action. Instead, you first created the late fees, meaning you had not forgiven them, then deleted the late fee transactions, but never unchecked the box. So you made more work for yourself. The program has now taken you back to the same place you were before you decided to forgive the late fee. It awaits your instruction. Either create the late fee or change the instruction.

How should this be handled? I issue an invoice for $25.00 and it goes late, I generate the late fees and resend the invoice to the customer. We can not assess more than a 2% fee making it $0.50. The check arrives tomorrow meaning they had already mailed it. Should I go back and request they mail a check for $0.50? Should I send them an invoice NOT showing late fees then expect them to calculate it on their own and include it? I don’t see a way to do this without “creating more work for myself”

It seems you have to generate the late fees and resend the invoice because we have no way to know they have already mailed a check. I guess we will just live with the extra steps to edit the fees.

You are making much of nothing. In the situation you describe, exactly four clicks are needed:

  • Select Sales Invoices tab
  • Click Edit for the sales invoice
  • Uncheck the late payment fees box
  • Click Update

If you make your decision to waive fees while viewing the invoice before entering the late receipt, only the last three clicks apply. No need to send another invoice. No need to generate late fees. That hardly seems burdensome.

The steps you have described do not waive any late fees, they only prevent them from being applied in the future. Let me give you an example lifecycle of an invoice in our organization, and I would like your opinion or anyone else on how it should be handled.

January 1 - recurring invoice for $100 is created and e-mailed to customer. This customer is now aware they owe my company $100. This invoice is due on January 16th.

January 16th - This invoice is now late and we generate late fees of $2.00 for this customer and resend the invoice. This gives them their new balance of $102 and serves as a reminder they owe us money.

January 17th - A check arrives from the customer for $100. No mail is that fast, so they clearly paid their invoice on the 13th or 14th and did not know of the $2.00 that was assessed on the 16th.

At this point, I have two options: 1) send them another copy of their invoice that now has a $2.00 balance due or 2) simply waive them. In cases like this, we choose to waive them. Now we must go to the invoice, uncheck the box then go to late payment fees and delete the late fee there.

You are assuming late fees are forgiven before they are created, which is not accurate. I agree, if I were forgiving them I would simply uncheck the box when the invoice is created. Customers need to be made aware they are being assessed late fees immediately, which is why we generate late fees as soon as the program warns us they need to be processed.

@VISA-MC, as this discussion has evolved, you have mixed several different scenarios together, providing confusing narratives on if and when late fees were processed, whether revised invoices were sent to customers, and so forth. So let me try to simplify things.

As long as you leave the late payment fee box checked on an invoice, Manager is going to continue prompting you to generate those fees until the full amount due, including any past fees, is received. The only way to turn that off is to uncheck the box.

If you become aware the customer has paid before you generate late fees, even if after the due date, you can circumvent (waive, forgive, call it what you like) the fees by unchecking the box before generating fees.

If you have already generated the fees and sent a revised invoice to the customer and then become aware they have paid, you should issue a credit note for the most recent late fees.

As a side note, perhaps your terms should be clearer. Most invoice due dates are taken in business to refer to receipt of funds by the issuer of the invoice, not the date a check was supposedly written (which could be fraudulent) or the check was postmarked. So if you want your customers to write their checks within 15 days, give them 20, but specify funds must be received by the due date, not just sent.