Late payment penalties and interest on arrears are provided for by law and commercial contracts. However, many companies do not apply them, for fear of damaging customer relations, or for lack of suitable tools. In practice, their application can significantly reduce payment times and secure cash flow. Excel is an excellent tool for quickly calculating these amounts. We offer you a free, easy-to-use Excel Penalties & Interest on Arrears template.
Why apply late penalties?
Late payment penalties act as a deterrent: they encourage customers to pay their invoices on time. They also constitute financial compensation for the company that suffers late payment. French law stipulates a minimum rate, often increased by a flat-rate collection fee.
In practice, informing your customers of the systematic application of penalties can be enough to improve your collections, without even needing to apply them.
Practical example in Excel
Our Excel template allows you to automatically calculate the penalties due based on :
- Invoice due date.
- Effective date of payment.
- The applicable contractual or legal rate.
- The amount of the initial invoice.
For example, an invoice for €10,000 paid 45 days late at a rate of 8% will incur penalties of around €100. Thanks to the file, this calculation is carried out automatically.
Founded in 2011, ASTON AI, voted Fintech of the Year 2015, has revolutionized the receivables management market in ten years by offering a high-performance, simple, comprehensive and innovative platform. ASTON AI platforms benefit from 10 years of continuous technological development and an in-house R&D department dedicated to digital services.
Download our Excel template Penalties & Interest on arrears
The Excel file is designed to be simple and immediately operational. It includes :
- An automatic calculation based on the number of days overdue.
- The option of setting the legal or contractual rate.
- Customer-by-customer tracking of amounts due.
Download the Penalties & Interest on Arrears Excel template now and secure your collections.
Best practices for applying penalties
Using an Excel spreadsheet isn’t enough: you also need to put in place a clear application strategy. Here are a few tips:
- Include late payment penalties in your general terms and conditions of sale.
- Inform your customers in advance of their possible application.
- Include penalties in your reminder letters or emails.
- Use penalties as negotiating leverage in disputes.
Excel limitations and Aston AI alternative
While Excel allows you to calculate penalties quickly, it quickly reaches its limits as the number of invoices increases. Manual updating becomes time-consuming and error-prone. What’s more, Excel can’t automate the integration of these penalties into customer reminders.
With Aston AI, you have a SaaS solution that integrates penalty calculations directly into your collection processes. AI offers intelligent reminders and automatically includes late payment interest in your letters and emails. You save time and increase your chances of getting paid faster.
Take the next step with Aston AI
The Excel template Penalties & Interest on Arrears is an excellent basis for raising customer awareness and securing your receivables. But for more efficient, automated management, discover Aston Cash Collection: SaaS collection software that integrates penalty calculation, automates your reminders and optimizes your collections.
Request a free demo today.
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