Late Fee on the Invoice in Ireland

A late fee is charged to the customer when they fail to pay an invoice or make payment by the agreed date. The purpose of charging a late fee is to encourage customers to always make timely payments. It also serves as a way to compensate the supplier for costs incurred in working capital management.

In order to efficiently execute a late payment penalty, provision for it should be included in the contract along with the calculation method. It is important to note that the collection of late fees are regulated, so this means there is a strong need to abide by applicable regulations before implementing this policy.

What Is the Standard Late Fee on an Invoice?

Generally, businesses charge a 1-2% monthly late fee on overdue invoices. However, the ability and extent of determining the late fee is dependent on the applicable regulations and industrial trends. It is strongly advised to ensure compliance with applicable laws and regulations, particularly in this area.

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