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Late Fees FAQ's

  • Updated

FAQ topics in this article:

  • How are fees calculated? 
  • How does the Flat fee - charged once work?
  • How does the Percentage - charged once work?
  • How does the Annual Percentage - charged daily work?
  • How is the Grace Period considered?
  • What date is used to calculate late fees? 
  • Are credit notes considered? 
  • When can I use Bank Rates?
  • What happens when I change the rule rate or bank rate?
  • How do you identify overdue invoiced amounts?
  • How are Chart of Accounts (COA) used?
  • Will fees still be calculated once waived?
  • Do late fees have Audit logs?
  • Adding tenants to Late Fee rules

 

How are fees calculated?

Fees are calculated on outstanding/unpaid amounts and on amounts that were paid late

Late fees are generated per:
  • Invoice
  • Chart of Account (COA) and
  • Rule
  • Note: Line items with the same COA  will be grouped 
 

How does the Flat fee - charged once work?  

 
The entered flat fee amount will be charged once, based on the COA and the over due invoice. The amount days overdue will not be considered.
 

How does the Percentage - charged once work?

 
The entered percentage will be charged once, based on the COA and the over due invoice. The amount days overdue will not be considered.
 

How does the Annual Percentage - charged daily work?

 
This is an annual percentage calculated on a daily basis.
  • Amount of Days late divided by 365
  • Multiplied by (Daily percentage) + (optional - Bank Rate) 
  • Multiplied by Amount overdue

 

Scenario:

Monthly rent is $2420. The company rate is 9.5% (and the optional Bank rate is 2%). The tenant is 12 days late.

 

12 (Days late) divided by 365

Multiplied by 11.5% (including bank rate- 9.5%+2%)

Multiplied by $2420 (the amount)

Which calculates to $9.15 for the 12 days late.

 

How is the Grace Period considered?

This is the number of days grace tenants have to pay after the invoiced due date. Interest will be calculated dating back to the due date if payment is not made within the grace period.

 

What date is used to calculate late fees? 

Paid late is based on the date the money cleared, not the date it was captured or reconciled in Re-Leased. Late fees use the "payment date" not the processed date.

Are credit notes considered? 

Credit note allocations are treated like payments, the allocation date is what is used for the calculation 

 

When can I use Bank Rates?

Bank Rates can be created and stored in the late fee rules section at any time. Bank rates can only be applied to the Annual percentage - charged daily for this version of Late Fees.

  • Bank Rate field will drop down automatically when Annual percentage - charged daily, rule type is selected. 

What happens when I change the rule rate or bank rate?

When calculating fees the latest version of the rule is applied.

    • Historical changes to the rule won't be taken into consideration 
    • If the bank rate percentage is changed on a rule, all pending fees will be recalculated according to the latest percentage and won't take the previous percentage into consideration 

Note: For any changes to the rules e.g. percentage rates or bank rates, it is suggested to generate an interim late fee invoice before making any changes, so that any outstanding fees that are yet to be generated will not be affected. 

  • There are two ways you can edit a Bank Rate:
    • From Late Fee Rules > Bank rates > Select 3 dots next to Bank rate > EDIT
    • From Late fee rules > Current rules > drop down required rule > select pencil on Fee rule section > select Bank rate field.
  • If you do edit a Bank Rate that is associated with an "Active" current Fee Rule you will receive a pop warning link the one below:  

Edit_bank_rate_warning.png

For more on creating and editing Bank Rates see article: Creating Late Fee Rules

 

How do you identify overdue invoiced amounts?

Chart of Accounts are used to identify overdue invoices, the COA will look at the line items within the overdue invoice.  

 

How are Chart of Accounts (COA) used?

  • A rule must have an income COA, at least one or many which is used for creating late fees. This must have a tax type.  
    • Note: When choosing the income COA for the rule, take consideration around "selecting ALL" this may add the "paid to" COA and result in generating late fees on late fees.
  • A rule must also have a paid to COA, used for where late fees are charged to
  • Rules can be assigned to many COAs  
  • Assigning multiple rules to the same COA will result in multiple fee line items 

Note: When you have multiple rules, they do not consider each other e.g. creating rules using the same COA's will result in late fees being generated for the same overdue invoices.  

 
 

Will fees still be calculated once waived?

Waiving a fee will result in no further fees being generated for the applicable COA lines within that specific invoice for that specific rule. If the invoice is still not paid going forward no further fees will be raised.
 

Do Late fees have Audit logs?

Yes we do.
Although, we do not have any UI for this just yet. In the meantime, you can request through us for any queries until we have the UI built out.

 

Adding tenants to Late Fee rules

 
You are only able to add current tenants to Late Fee rules, vacated and or future tenants will not be available to select from.  For vacated tenants, you may raise the late fee invoice manually or use a repeating income invoice template.

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