Interest to charge on overdue invoices. The Late Payment Interest Calculator takes overdue amount, annual interest rate on late payments, days overdue and returns interest to charge plus amount now due, interest per day. Results update as you type, and the formula is shown under the result so you can repeat it in your own spreadsheet.
Financial ratios are only useful in comparison: against last year, against a competitor, or against the benchmark for your industry. Take the figures from the same set of accounts, note whether they are yearly or monthly, and read each ratio alongside the others in its family. Use the worked example below to check the maths against your own figures.
How the Late Payment Interest Calculator works
Late-payment interest accrues daily on the unpaid amount at the rate stated in your terms (or the statutory rate). Quote the daily figure on reminders so customers see the cost of waiting.
Worked example
With the example values (overdue amount of ₹10,000, annual interest rate on late payments of 18%, days overdue of 45 days), the interest to charge is ₹221.92; amount now due ₹10,221.92, interest per day ₹4.93. Change any figure above and the result updates immediately; use Copy results to paste the summary into a note or email.
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Frequently Asked Questions
How is interest to charge calculated?
interest = overdue amount × annual rate × days overdue ÷ 365.
Which figures do I need?
Overdue amount, annual interest rate on late payments, days overdue. Take them from the same period and the same set of accounts or reports so the ratio is consistent, and check the example values as a guide to the units expected.
What is a good value for this ratio?
Benchmarks differ by industry, size and business model, so compare with companies like yours and with your own history. A ratio moving in the wrong direction for several periods matters more than any single number.
