What are late payments really costing you?

The number of days customers get to pay, as printed on your invoice. Net 30 means the full amount is due 30 days after the invoice date.

The day a late customer typically pays, counted from the invoice date. Look at a few recent overdue invoices and compare the sent date to the paid date.

Hours you and your staff spend each month sending reminders, calling and emailing about unpaid invoices. An honest rough count is fine.

What an hour of that time is worth: your own hourly rate, or what you pay the person who does the chasing, wages plus payroll taxes.

The yearly rate on the credit you use to cover gaps, such as a line of credit, loan or card. APR is the yearly interest rate, shown on your statement.

The share of invoiced revenue you never collect and write off. If that is about 1 invoice in 200, enter 0.5. Your bookkeeper calls these bad debts.