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Sales Invoices - Add interest to late invoices (including paid/part-paid Invoices)

Ability to add interest for the late payment. This includes part-paid too

Purpose: Save time by adding the interest without having to delete the existing one and remake a new one with the additional interest.

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AdminXero Team (Admin, Xero) shared this idea  ·   ·  Report…  ·  Admin →
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under review  ·  AdminKelly Munro (Community Manager, Xero) responded  · 

Hi everyone, a year on from my last engagement we wanted to provide an update for you all here.

As many will be across we're in the midst of making a lot of iterations and improvements to new invoicing leading up to the retirement of classic invoicing in September (2024).

We have a fair amount of work lined up in the teams schedule over the coming months and to give an indication there isn't any committed plans around a function to add interest to invoices.

That said, we do have a team that have picked up and are considering how we might solve this with the technology in new invoicing - It's early days on this yet, but I'll share if there's any progress on this for you all here.

In the meantime, as has been shared by others over time there are a few ways you could accomplish this today;

  • Include detail of any charges for late payments to your invoice template Payment terms & details, and
  • Edit and add a new line to your invoice to add the late fee - you could make use of Xero's inbuilt calculator for this, or
  • Edit and add a 'mark up' to each line of your invoice - again Xero's inbuilt calculator could help with calculating the amounts
  • Explore Xero's app store to see if you can find an integration that works for your business needs
  • In an effort to prevent late payment of invoices Credit limits may help in being able to prevent customers raising too much debt with your business

We appreciate the options above don't automate the full process of what you're asking here, and we will share if there's any news. Thanks

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  • Gideon Retief commented  ·   ·  Report

    Hi all,

    There is an existing 3rd party add-on/app that you can use. We have been using it. It works, but we believe it could be better and we're investigating the feasibility of building the functionality ourselves.

    Feel free to contact me on gideon@foundationdigital.co.nz - I'm happy to share more.

  • Ryan Vu commented  ·   ·  Report

    Hi Kelly,

    I think it would be a great thing if you and Xero communicated a realistic timeline of when your developers would actually implement this even if its 2-3 years down the road. That would help the community feel like they are being listened to.

  • Alison Langdon commented  ·   ·  Report

    Hi Kelly, thanks for the update?

    I think, however that all of the people who have been asking for this for many years (and not just the 161 votes that this idea currently has) are all feeling as though they are not being listened to.

    Xero is advertised as a product that can assist small businesses with their bookwork. How can you honestly say that this is so, when a fundamental tool that most small businesses have in their repertoire (charging interest on overdue accounts as in their terms of trade) is NOT a feature of your product?

    Just asking...

  • Rebekah Green commented  ·   ·  Report

    This is a reply to Alexandra Egan - the only way to currently calculate and charge a client interest on overdue balances is manually outside of Xero, then raise an invoice for the penalty interest amount.
    There is no way to edit and add interest to an existing invoice that has been approved and issued.

  • ALEXANDRA EGAN commented  ·   ·  Report

    How do I Add interest to late invoices? There are no steps to show me how....

  • ALEXANDRA EGAN commented  ·   ·  Report

    Can someone please help me. I'm trying to find out how to edit current invoice and add interest on total amount please. This has been THE MOST challenging experience to get an answer on something that's so simple and yet it's taken me all morning and i'm yet to get it resolved.

  • Alicia Rogoza commented  ·   ·  Report

    Having the interst auto calculate when you produce a statement liek Sage used to, would help small businesses with cash flow.

  • James Strickland commented  ·   ·  Report

    This would be a great feature for our business, expecially if it had the option to calculate 'statutory interest' for the UK (bank of england base rate + 8%).
    This idea was submitted in 2012, how can this not have been addressed more than 10 years later when Quickbooks already offer it for free.
    At year end it could be a deciding factor whetheras to stick with Xero or switch to Quickbooks.

  • Thames Joinery commented  ·   ·  Report

    no wonder xero share pricing is crashing they dont listen to what the customers want i used myob 10 yrs ago and it had this feature, **** my accountant wanting me to use xero myob was so much better

  • Alex Mahara commented  ·   ·  Report

    I've had a look at Latechaser but I'm not keen to add 3rd party apps as they often 'go wrong' unexpectedly. I was hoping Xero could just add a Late Payment Fee item in the invoice which dynamically calculates interest on the invoice; a simple but highly useful function.

  • Graham McTaggart commented  ·   ·  Report

    To who it may help, we have recently come across an app for applying interest that is Xero compatible called Latechaser, we are still getting used to it, but it seems like it will be pretty useful.
    Maybe give the free trial a check out at https://app.latechaser.com/. I have no affiliation or financial ties with them, just trying to help people in the same situation.

  • DERVIS KONURALP commented  ·   ·  Report

    I have to use excel to calculate interest until the day and then I have to raise a separate invoice, can Xero not help us?

  • Philip Lombard commented  ·   ·  Report

    This will support our business in driving overdue invoices and is seen as a critical element in any business.

  • Beth Dupes commented  ·   ·  Report

    I cant believe Xero has not done something about this all these years

  • Alicia Viljoen commented  ·   ·  Report

    This would make life so much easier. Adding an add on, is not worth the while for small entities

  • Natasha Bridgeman commented  ·   ·  Report

    MYOB has option to charge interest for overdue accounts, would be good for xero to have as a standard feature not an add on.

  • Cynthia Ibrahim commented  ·   ·  Report

    interest and late payment fee feature should be part of XERO business

  • GNB Properties commented  ·   ·  Report

    Please add this critical feature for the benefit of all users.

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