Late payment calculator
How the late payment cost calculator works
The calculator combines three cost layers: tied capital (opportunity cost), hours spent chasing, and annual compounding. Together they show the real drag on cash flow.
For practical scripts and follow-up timing, see how to chase unpaid invoices.
What counts as a real cost of late payment
Most teams only count the invoice face value. The hidden losses are time, financing pressure, and delayed reinvestment.
| Cost type | What it means | Typical impact |
|---|---|---|
| Cash flow gap | Capital tied up and unavailable | 8–12% annual equivalent |
| Time cost | Hours spent on reminders and disputes | $75–200/invoice at pro rates |
| Relationship friction | Awkward chasing affects client trust | Hard to quantify, real |
| Annual compounding | Small monthly leakage scales up | Often 5–15% of annual revenue |
Industry benchmarks for late payment
- UK SMEs are owed around £22,000 in late payments at any time (Xero 2024).
- US small businesses wait roughly 37 days past due on average (QuickBooks 2025).
- Freelancers often spend 1.5–2 hours per invoice in follow-up.
External references
Related tools: Invoice Late Fee Calculator and DSO Calculator.
Written by Pasko Djonovic, Founder at ChaseAI • Last updated May 6, 2026
