Late Payment Cost Calculator

Estimates what late-paying clients cost a freelancer or small studio each year in cash stuck past due, financing and hours spent chasing.

Your estimate

Cash stuck past due on an average day...

Financing cost per year...

Chasing time cost per year...

Total annual cost of late payments...

Estimates only. Assumptions are listed below, and you can change every input.

Late payments are easy to shrug off one invoice at a time. A client pays 20 days after the due date, you send a couple of reminders, the money arrives and you move on. Added up across a year, those delays tie up real cash, push you onto a credit card or line of credit, and eat hours you could have billed. Most freelancers have never put a number on it.

This calculator estimates that number from six figures you already know. It works out how much of your money is sitting past due on a typical day, applies the yearly rate you pay (or give up) to bridge that gap, and adds the time you spend chasing at your own hourly rate. It does not include invoices that are never paid, and it uses simple averages rather than your exact ledger, so treat the result as a well-founded estimate, not an accounting figure.

How to use this tool

Enter what you invoice in a typical month and roughly what share of those invoices get paid after the due date.
Add the average number of days those late invoices run past due, and the yearly rate you pay on the credit card or credit line you use to bridge the gap (use 0 if you never borrow).
Enter the hours you spend chasing payments each month and your hourly rate, then read the total annual cost and the cash stuck past due on an average day.

What the math assumes

Uses a 30-day month to convert days late into the average balance sitting past due on a given day.
The yearly cost of bridging cash is applied to that average overdue balance for a full year; if you never borrow and do not count lost returns, set it to 0 and only the time cost remains.
Chasing time is valued at your full hourly rate, which assumes those hours could have been billed.
Late invoices are assumed to arrive in a steady stream through the year rather than in one lump.
Invoices that are never paid are not included; the tool only counts invoices that are paid eventually, just later than agreed.

Frequently asked questions

Why does the calculator use my full hourly rate for chasing time?

Because an hour spent writing reminders and checking bank statements is an hour you could have spent on billable work. If you would not have filled that hour with paid work, enter a lower rate to reflect what the time is really worth to you.

What if I never borrow to cover late invoices?

Set the yearly cost of bridging cash to 0. The financing cost drops to zero and the estimate is driven by chasing time alone. Some freelancers still enter the rate a savings account or index fund would pay, since cash stuck in receivables cannot earn anything.

How is cash stuck past due calculated?

It multiplies your monthly billings by the share paid late and by the average days late divided by 30. If you bill $8,000 a month, 40% pays late and those invoices run 18 days late, about $1,920 is overdue on any given day.

Does this include invoices that are never paid?

No. Write-offs are a separate and usually more painful problem. This tool only counts invoices that are paid in the end, just later than agreed.

Link to this toolhttps://invoicenudgr.com/tools/late-payment-cost-calculator/

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More free tools from InvoiceNudgr

Invoice Late Fee Calculator: Works out the late fee and total now due on an overdue invoice from the terms you put on it, and shows what that fee comes to as a yearly rate.
Deposit and Milestone Exposure Calculator: Shows how much unpaid work you would be carrying at the worst moment of a fixed-price project given your deposit, milestone count, timeline and payment terms.

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