To encourage timely payments from your clients, you can include a late fee in your smart file contract. Late fees will be added to the total payment amount if a payment is overdue by 30 days. HoneyBook's late fees do not accumulate, so your clients will not be charged late fees on top of late fees.
📣 Note
Late fees cannot be applied to legacy files. If you are using legacy files and want to include late fees in your contracts and invoices, you will need to add smart files to your account.
Add a late fee notice to a contract
Late fees should only be added if your contract with the client includes a late fee stipulation—the fee may not be legally required if you do not perform this step. A default legal note is supplied below and you should consult with a legal professional if you have further questions about your unique situation.
When creating a contract, include in your terms that a late fee can be assessed for nonpayment
Include what late fee percentage you want to use
A best practice is to add this notice to your contract templates so you know it’s always included
Use the late fee smart field when you add this contract note to your templates so you don't have to update the fee amount for every unique contract
You'll want to replace the {{late fee smart field}} text in the note with this smart field.
Unless otherwise agreed, all fees shall be due and payable by the due date set forth on the invoice. Invoiced amounts not paid by their due date may be subject to a monthly "late charge" of {{late fee smart field}}% interest fee at an amount not to the maximum amount permitted by applicable law.
Add a late fee to an invoice
Once you’ve added the legal note to your contract, turn on the late fee.
1. When setting the payment options for your invoice, toggle on Client pays late fee
2. Enter the percent amount the late fee should be
a. This percentage is based on the payment value
b. Late fees are capped at 10%
The late fee can now be assessed after 30 days have passed after payment was due.
✅ Note
You can also turn late fees off for a specific invoice if you used a smart file template where late fees were toggled on.
How late fees appear for your client
When a late fee is added to your client’s payment, they’ll receive a notification and can view the late fee amount when they go to make a payment.
The late fee will appear as a dollar amount, and is already added to the payment total they’ll see. HoneyBook will also generate a fresh invoice with the late fee added so your client isn’t surprised by the additional cost.
Send payment reminders and cancel late fees
Reminding clients to pay will help them pay on time so you won’t have to assess a late fee. You can use automatic payment reminders, as well as send reminders manually through your Payments screen, which is shown below. Automatic reminders are a setting that can be toggled on and off, so check that yours are turned on.
HoneyBook will send a text message reminder to your client on the day the payment is due, but you can also manually send a reminder.
Also, you can cancel a late fee for payments at any time from the Payments screen (as well as see the late fee dollar amount for that late payment).
While reviewing all your payments, select the specific overdue payment you want to review
From here, send a reminder to pay or cancel the late fee
Select Remind to send an email and mobile reminder to your client to pay the invoice
Select Cancel late fee to remove the late fee from the overdue payment
📣 Note
Your clients won’t receive these emails if your automatic payment reminders aren’t turned on. Learn how to adjust your automatic payment reminders. You can also view the late fee that was added to the payment total from your invoice's action summary.
Still have questions? Feel free to send us a message by clicking the Question Mark icon on any HoneyBook page. Our team is always happy to help!