Automatically charge clients a late fee when an invoice is past due — as a one-time charge, a recurring fee that compounds until paid, or both, with an optional cap on the total.
Required: Enrollment an Canopy Payments
Set it once and let Canopy handle the follow-up — recurring, compounding late fees give clients a reason to pay faster and help you recover revenue that's otherwise lost to slow payers during tax season.
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Enable Automated Late Fees
You'll set everything up here on the web app. Once saved, late fees will also show up on invoices in the mobile app, but configuration is web-only.
Click your profile picture/initials in the bottom left of the screen.
Click Settings.
Navigate to Billing Settings > Invoicing.
Scroll to the Late Fees section.
Toggle on Add a late fee of [ ]% when [ ] day(s) past due, and enter your percentage and days past due.
Skip the next two steps if you only want to charge a late fee once per invoice.
To have the fee repeat automatically until the invoice is paid, toggle on Repeat this fee every [ ] day(s) while the invoice remains unpaid, and enter the interval.
To limit how much a single invoice can accrue in late fees, toggle on Cap total late fees, enter a limit, and choose percent or dollars from the dropdown.
Toggle on Reset this cap annually if you want the cap to reset each year instead of applying indefinitely.
Under Client Rules, choose which clients receive late fees: All, Exclude, or Include specific tags or clients.
Deleting a tag (Settings > Tags) will automatically disable any late fees configured with that tag in your client rules.
Select Save Changes.
Read the liability notification and click I understand, save if using recurring late fees.
⚠️ Important: You're solely responsible for making sure your configured late fees comply with the laws in your clients' jurisdictions — late fees are regulated in many states and often require disclosure or client agreement before they can be charged.
Canopy applies the policy you set but doesn't verify its legality, and nothing here is legal advice; consult your professional advisors before enabling late fees. Changes take effect the next day and apply to all invoices that meet your conditions, including invoices that are already past due.
What Your Client Sees
When Automated Late Fees are active, outstanding invoices display a Late Fee Notice telling clients about the charge upfront — for example, "Invoices are subject to a late fee of up to 1% when they are past due," reflecting the percentage you configured.
Heads Up! Client statements include any applicable late fees in the total amount due. Late fees aren't broken out separately on the statement, but you can see the exact amount on the corresponding invoice or in the invoice editor. Learn how to generate a statement here.
View Late Fee Added Statuses on the Invoice Dashboard
Click Billing > Invoices in the Global Navigation bar.
Under the Status column, select Late fee added, then Apply.
Click an invoice number.
Scroll down to Invoice History to see when a late fee was added and how much it was.
Remove a Late Fee
The only way to remove a late fee from an invoice is to edit the invoice directly.
Click Billing on the left sidebar.
Select Invoices.
Select an invoice that has a late fee.
Click the three stacked dots in the top right, then select Edit.
Click the delete icon next to the late fee line item.
Select Preview changes.
Choose to either Send or Save the invoice.
Good to Know: Manually deleting a late fee stops it from being reapplied to that invoice in the future — including any recurring fee that was set to keep charging until the invoice is paid.
Summary
Automated late fees charge clients when invoices go past due, with options to make the fee recurring, cap the total amount, and control which clients are affected. Once enabled, the fee is disclosed to clients automatically and tracked on the invoice dashboard and history.
Need Help?
Contact Support or ask Penny, our AI Support Bot, for assistance.