calculator

Late-Payment Cost Calculator

Show what delayed customer payment actually costs the business.

Who it is for: UK self-employed tradespeople and small trade contractors.

What you get: Funding cost, chasing cost, cost per invoice and annual cost.

How this calculation works

This tool runs in your browser. No data is sent to our servers. Below are the assumptions used.

Funding cost uses the borrowing rate you enter, pro-rated for the days late.
Statutory interest is illustrated at 12% (base rate plus 8%) and applies to commercial debts only. Check the current base rate before charging it.

Your figures

Live

Days beyond agreed terms38
52 days taken − 14 days agreed.
Cost of funding the gap£39.98
£3,200.00 × 12.0% × 38/365. This is what carrying the customer costs you.
Your chasing time£95.00
2.5 hrs × £38.00 — time not spent earning.
Total cost of this late invoice£134.98
Funding cost plus chasing time.
Annual cost at this rate£1,079.82
× 8 late invoices a year. This is usually more than the discount you agonise over at quote stage.
Illustrative statutory interest£39.98
Example only, using 12% as base rate plus 8%. Statutory interest applies to commercial debts, not consumer ones.

Businesses can normally claim statutory interest and a fixed compensation sum on late commercial invoices. The illustration below uses a 12% combined rate as an example only — check the current Bank of England base rate plus 8% before charging it.

How this is worked out

Funding cost uses the borrowing rate you enter, pro-rated for the days late.
Statutory interest is illustrated at 12% (base rate plus 8%) and applies to commercial debts only. Check the current base rate before charging it.

Results are planning aids based on figures you enter. They are not financial, tax or legal advice, and no price is guaranteed to be accepted.

Hypothetical worked examples

To help you understand the outputs, here are illustrative examples generated using the same logic.

Illustrative example 1: A sole trader working 30 billable hours per week with £18,000 in annual overheads needs to recover £11.54 per hour before any profit is added. If they want a £35,000 target owner pay before personal tax, the true hourly rate rises to around £28–£32 based on the inputs entered.

Illustrative example 2: A small team with a van, premises and two employees requires a higher day rate to cover shared operational costs. The calculator shows the break-even point clearly so the business owner can set a rate that covers all costs before profit is considered.

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The account or card most trades use for this

A referral reward is not a recommendation. Check the terms and decide on the numbers you have just worked out.

Business bank account

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Where this fits

How to Get Paid Faster as a Tradesperson

Paperwork that goes with it

A written sequence so chasing runs on a timetable instead of on how annoyed you feel. Five stages, from a polite nudge to a final notice.

Late-Payment Email Pack