How It Works
Three simple steps to get accurate calculations
1
Enter Invoice Details
Input your invoice amount, payment terms, and actual payment delay.
2
Set Your Costs
Add your cost of capital and potential late fee percentage.
3
Calculate Impact
See the total cost of delayed payments on your business finances.
4
Optimize Collection
Use insights to improve payment terms and collection processes.
Invoice Payment Delay Analysis
Calculate the financial impact of delayed invoice payments on your business cash flow.
Share Your Scenario
Copy link with your current inputs
Results
Financing Cost of Delay
$16.44
Cost of 45 day delay
Cash-Flow Delay45 days
Late Fee You Can Charge$75.00
Effective Interest Rate Lost0.33%
Opportunity Cost Impact$91.44
Detailed Breakdown
Original Payment Terms0 days
Actual Payment Delay45 days
Daily Financing Cost$1.10
Total Cash Flow Impact$91.44
Business Insights
Financing Cost Impact
This late payment cost you $16.44 in financing costs based on your 0.33% cost of capital.
Late Fee Opportunity
You could have charged $75.00 in late fees, which would more than cover your financing costs.
Daily Impact
Each day of payment delay costs you $1.10 in financing costs.
Payment Cycle Impact
A 45-day payment cycle is within manageable range but still impacts cash flow.
Recommendations
Consider implementing late fees, sending automated reminders, and following up promptly on overdue invoices to minimize cash flow impact.
Frequently Asked Questions
How much do late payments cost my business?
Late payments cost your business in financing fees, opportunity costs, and administrative time. Our calculator shows the financial impact based on your cost of capital and payment delays.
Should I charge late fees on overdue invoices?
Yes, late fees help offset the cost of delayed payments and encourage timely payment. Most businesses charge 1.5-3% per month or a flat fee for overdue invoices.
What is cost of capital and how do I calculate it?
Cost of capital is your interest rate for borrowing money or the return you could earn investing it elsewhere. Use your business loan rate, line of credit rate, or investment return rate.
How can I reduce payment delays?
Improve payment terms with shorter net terms, require deposits, offer early payment discounts, send automated reminders, and use clear invoicing with multiple payment options.
When should I follow up on overdue invoices?
Follow up immediately when an invoice becomes overdue. Send the first reminder 1-3 days late, then weekly reminders. Our calculator shows why quick action saves money.
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Results are estimates for informational purposes only. Consult professionals for important decisions.