How late payment fees work in Trove

Connect your Xero account and Trove imports your customers and their overdue invoices. From there, late payment fees run as part of your normal chasing workflow rather than as a separate job.

  1. Set a late fee policy per workflow. Choose the interest rate (statutory or your own), any fixed compensation fee, and how many days overdue an invoice needs to be before the fee applies.
  2. Enrol invoices automatically. Once a workflow has a policy, every overdue invoice inside it is enrolled without you touching each one individually.
  3. Fees are calculated on schedule. The interest accrues daily against the overdue balance and stays current every time it’s shown to the customer.
  4. Optional: Raise a late fee invoice in Xero. Raise your late fee as an invoice, either in draft or posted state in Xero. This is optional though - you can also keep late fee invoices out of Xero altogether.
  5. Fees appear on the customer’s statement. Statements list the outstanding invoices and the fees accrued against them, recalculated at the point of sending.
  6. Fees can be waived when the invoice is paid. All fees raised in Xero are separate invoices, making them easy to waive if the customer pays.

Different customers, different policies

You can run more than one policy at once. A serial late payer and a 20-year account don’t have to be treated the same way. Our guide to running two different late payment fee policies covers how to split your ledger.

If a customer disputes a fee or you’d rather hold off, you can exclude specific invoices or whole customers from a policy at any point. Nothing about applying fees is irreversible until you decide to push it into Xero.

Why the fee doesn’t have to sit in your Xero ledger

Most businesses treat a late payment fee as leverage rather than revenue. It changes where an overdue invoice sits in a customer’s payment run, and once they’ve paid, you’d rather it disappeared than sat in your accounts as something to credit back.

Trove gives you the option of applying a fee against the overdue invoice and showing it on the statement without writing it to Xero. You decide when, or whether, to formalise it as a real invoice. Waiving a late payment fee once the customer pays covers why that’s the outcome most businesses choose, and how to communicate it to the customer.

Getting started with Trove’s late fee policy

Setting up a policy takes a few minutes once your Xero account is connected: choose the workflow, set the interest rate and compensation fee, and decide when the fee should start accruing. From there it runs on every overdue invoice in that workflow without further input.

If you choose to raise late payment fees as invoices in Xero, these invoices can also be automatically emailed to the customer.

The free way to start: Treasure

If you just want to calculate what a single overdue invoice is costing a customer, Treasure by Trove is a free, standalone tool for that. Set your own policy or use the statutory rates, upload or key in an invoice, and it works out the fee. Connect Xero and it will raise the fee invoice for you.

Treasure works out what you’re owed and can raise the fee in Xero. If you need something more comprehensive, Trove connects late fees to the rest of your invoice chasing, so fees are applied, sent and waived automatically without you lifting a finger.

Trove runs a free 30-day trial or you can book a demo to see the full workflow, including statements, waiving and multiple policies, working on your own Xero data.