Act on the result
Use the result to improve payment terms and follow-up, not to assert a legal fee.
Educational only: Business decision support, not accounting, tax or legal advice.
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Update policy: Reviewed when formulas or official dependencies change.
Scope: Market-neutral small-business planning using your own assumptions.
What this planner helps you decide
Best for
Owners quantifying the explicit cost of one late customer payment.
Outputs
Funding cost, total late-payment cost and cost as a share of invoice.
Start here
Enter the invoice, days late, funding rate, administration and delayed-capacity contribution.
Use a different tool when: Do not use this to quantify cash release and annual benefit from a collection scenario; use Receivables Collection Impact Planner for that decision. Use this tool to measure the cost created by one late customer payment.
Decision pack · Step 4 of 5
Quote to Cash
Connect a viable service rate to a scoped quote, realised job margin, collection cost and short-term cash forecast.
- 1. Set the service rate
- 2. Build the project quote
- 3. Review realised margin
- 4. Price the collection delay
- 5. Forecast short-term cash
Current decision: What funding, administration and capacity cost does late payment create?
Next: Place expected receipts and payments into the thirteen-week forecast.Cash & growth
Late Payment Cost: funding cost
Funding cost, total late-payment cost and cost as a share of invoice.
Amounts use the same currency as your inputs. No currency conversion is performed.
Cash planning assumptions
Use your own records on one consistent currency, period and tax basis.
Your numbers stay in this browser
Customer invoice amount on the selected tax basis. Use one consistent currency, period and tax basis.
Delayed days used consistently in the funding formula.
User-entered annual cost of funding.
Additional assumptionsReview every late payment cost planner assumption before using the result.
Explicit follow-up and collection administration cost. Use one consistent currency, period and tax basis.
User-entered opportunity cost, not a legal fee. Use one consistent currency, period and tax basis.
Positive annual day basis used by the funding formula.
Decision result
Exact engine outputs with signed cash effects preserved.
- Total late-payment cost
- 600.00
- Funding cost
- 300.00
- Cost as share of invoice
- 1.64%
| Component | Exact engine result |
|---|---|
| Funding cost | 300.00 |
| Total late-payment cost | 600.00 |
| Cost as share of invoice | 1.64% |
Early-payment discount module
Compare the cost of offering a discount with the funding cost avoided by collecting earlier. This module has no standalone public route.
- Discount cost
- 2,000.00
- Funding cost avoided
- 805.48
- Total benefit
- 805.48
- Net discount cost
- 1,194.52
- Discounted receipt
- 98,000.00
- Days accelerated
- 30 days
- Lower-cost option
- wait
- Simple annualised discount rate
- 24.83%
Calculation details
View calculation detailsView the formulas and inputs used for these results.
Discount cost
Discount cost
invoice amount × discount rate2,000Result2,000.00
Compares discount cost with funding cost avoided on the entered day-count basis. Full precision is retained until display.
Early-payment discount formula →Inputs used by these formula steps
- Discount costInvoice Amount
- 100,000
- Discount costDiscount Rate Percent
- 2
- Discount costStandard Payment Day
- 40
- Discount costEarly Payment Day
- 10
- Discount costAnnual Funding Rate Percent
- 10
- Discount costDay Count Basis
- 365
- Discount costAdministration And Capacity Benefit
- 0
Discounted receipt
Discounted receipt
invoice amount − discount cost98,000Result98,000.00
Compares discount cost with funding cost avoided on the entered day-count basis. Full precision is retained until display.
Early-payment discount formula →Inputs used by these formula steps
- Discounted receiptInvoice Amount
- 100,000
- Discounted receiptDiscount Rate Percent
- 2
- Discounted receiptStandard Payment Day
- 40
- Discounted receiptEarly Payment Day
- 10
- Discounted receiptAnnual Funding Rate Percent
- 10
- Discounted receiptDay Count Basis
- 365
- Discounted receiptAdministration And Capacity Benefit
- 0
Funding cost avoided
Funding cost avoided
cash collected early × funding rate × accelerated days ÷ day-count basis805.48Result805.48
Compares discount cost with funding cost avoided on the entered day-count basis. Full precision is retained until display.
Early-payment discount formula →Inputs used by these formula steps
- Funding cost avoidedInvoice Amount
- 100,000
- Funding cost avoidedDiscount Rate Percent
- 2
- Funding cost avoidedStandard Payment Day
- 40
- Funding cost avoidedEarly Payment Day
- 10
- Funding cost avoidedAnnual Funding Rate Percent
- 10
- Funding cost avoidedDay Count Basis
- 365
- Funding cost avoidedAdministration And Capacity Benefit
- 0
Days accelerated
Days accelerated
standard payment day − early payment day30Result30 days
Compares discount cost with funding cost avoided on the entered day-count basis. Full precision is retained until display.
Early-payment discount formula →Inputs used by these formula steps
- Days acceleratedInvoice Amount
- 100,000
- Days acceleratedDiscount Rate Percent
- 2
- Days acceleratedStandard Payment Day
- 40
- Days acceleratedEarly Payment Day
- 10
- Days acceleratedAnnual Funding Rate Percent
- 10
- Days acceleratedDay Count Basis
- 365
- Days acceleratedAdministration And Capacity Benefit
- 0
Total benefit
Total benefit
funding cost avoided + administration and capacity benefit805.48Result805.48
Compares discount cost with funding cost avoided on the entered day-count basis. Full precision is retained until display.
Early-payment discount formula →Inputs used by these formula steps
- Total benefitInvoice Amount
- 100,000
- Total benefitDiscount Rate Percent
- 2
- Total benefitStandard Payment Day
- 40
- Total benefitEarly Payment Day
- 10
- Total benefitAnnual Funding Rate Percent
- 10
- Total benefitDay Count Basis
- 365
- Total benefitAdministration And Capacity Benefit
- 0
Net discount cost
Net discount cost
discount cost − total benefit1,194.52Result1,194.52
Compares discount cost with funding cost avoided on the entered day-count basis. Full precision is retained until display.
Early-payment discount formula →Inputs used by these formula steps
- Net discount costInvoice Amount
- 100,000
- Net discount costDiscount Rate Percent
- 2
- Net discount costStandard Payment Day
- 40
- Net discount costEarly Payment Day
- 10
- Net discount costAnnual Funding Rate Percent
- 10
- Net discount costDay Count Basis
- 365
- Net discount costAdministration And Capacity Benefit
- 0
Simple annualised discount rate
Simple annualised discount rate
discount rate ÷ (1 − discount rate) × day-count basis ÷ days accelerated0.25Result24.83%
Compares discount cost with funding cost avoided on the entered day-count basis. Full precision is retained until display.
Early-payment discount formula →Inputs used by these formula steps
- Simple annualised discount rateInvoice Amount
- 100,000
- Simple annualised discount rateDiscount Rate Percent
- 2
- Simple annualised discount rateStandard Payment Day
- 40
- Simple annualised discount rateEarly Payment Day
- 10
- Simple annualised discount rateAnnual Funding Rate Percent
- 10
- Simple annualised discount rateDay Count Basis
- 365
- Simple annualised discount rateAdministration And Capacity Benefit
- 0
Lower-cost option
Lower-cost option
sign of net discount costwaitResultwait
Compares discount cost with funding cost avoided on the entered day-count basis. Full precision is retained until display.
Early-payment discount formula →Inputs used by these formula steps
- Lower-cost optionInvoice Amount
- 100,000
- Lower-cost optionDiscount Rate Percent
- 2
- Lower-cost optionStandard Payment Day
- 40
- Lower-cost optionEarly Payment Day
- 10
- Lower-cost optionAnnual Funding Rate Percent
- 10
- Lower-cost optionDay Count Basis
- 365
- Lower-cost optionAdministration And Capacity Benefit
- 0
Inputs used
- invoiceAmount
- 100,000
- discountRatePercent
- 2
- standardPaymentDay
- 40
- earlyPaymentDay
- 10
- annualFundingRatePercent
- 10
- dayCountBasis
- 365
- administrationAndCapacityBenefit
- 0
Scenario comparison
Each row names the assumption axis changed from the baseline.
ScenarioResultDifference
Entered scenario600.00Baseline
Lower Days late570.00-30.00
Higher Days late630.0030.00
Save these results, change an input, then compare the updated figures with this baseline.
The baseline is temporary in this tab and is not added to shared scenario links or generated reports.
Calculation details
View calculation detailsView the formulas and inputs used for these results.
Total late-payment cost
Total late-payment cost
funding cost + administration cost + delayed-capacity contribution600.00Result600.00
Uses user-entered records on one consistent period, currency and tax basis. Raw engine precision is retained; presentation rounding never feeds calculation.
Late Payment Cost Planner formulas →Inputs used by these formula steps
- Total late-payment costInvoice Amount
- 36,500
- Total late-payment costDays Late
- 30
- Total late-payment costAnnual Funding Rate
- 0.1
- Total late-payment costAdministration Cost
- 100
- Total late-payment costDelayed Capacity Contribution
- 200
- Total late-payment costPeriod Days
- 365
Funding cost
Funding cost
invoice amount × annual funding rate × days late ÷ day-count basis300.00Result300.00
Uses user-entered records on one consistent period, currency and tax basis. Raw engine precision is retained; presentation rounding never feeds calculation.
Late Payment Cost Planner formulas →Inputs used by these formula steps
- Funding costInvoice Amount
- 36,500
- Funding costDays Late
- 30
- Funding costAnnual Funding Rate
- 0.1
- Funding costAdministration Cost
- 100
- Funding costDelayed Capacity Contribution
- 200
- Funding costPeriod Days
- 365
Cost as share of invoice
Cost as share of invoice
total late-payment cost ÷ invoice amount, or zero for a zero invoice0.02 percentResult1.64%
Uses user-entered records on one consistent period, currency and tax basis. Raw engine precision is retained; presentation rounding never feeds calculation.
Late Payment Cost Planner formulas →Inputs used by these formula steps
- Cost as share of invoiceInvoice Amount
- 36,500
- Cost as share of invoiceDays Late
- 30
- Cost as share of invoiceAnnual Funding Rate
- 0.1
- Cost as share of invoiceAdministration Cost
- 100
- Cost as share of invoiceDelayed Capacity Contribution
- 200
- Cost as share of invoicePeriod Days
- 365
Inputs used
- Invoice amount
- 36,500
- Days late
- 30
- Annual funding rate
- 0.1
- Administration cost
- 100
- Delayed-capacity contribution
- 200
- Day-count basis
- 365
Open this calculator with preset values
This calculator supports documented, shareable scenario URLs. Compatible assistants and applications can construct links using the parameters below.
Scenario links contain only allowlisted numeric and closed-choice inputs shown in the URL; Margin101 excludes free text and identifying fields. Anyone you share the URL with can read those numbers, so do not include private or identifying data.
| Parameter | Meaning | Unit | Allowed values | Presence | Default |
|---|---|---|---|---|---|
| administrationCost | Explicit follow-up and collection administration cost. Use one consistent currency, period and tax basis. | currency units of collection administration cost/late invoice | 0 to 10000000 | Required | 100 |
| annualFundingRate | User-entered annual cost of funding. | decimal annual funding-cost rate applied to the overdue invoice (1 = 100%) | 0 to 1 | Required | 0.1 |
| daysLate | Delayed days used consistently in the funding formula. | calendar days after the contractual invoice due date | 0 to 3650 | Required | 30 |
| delayedCapacityContribution | User-entered opportunity cost, not a legal fee. Use one consistent currency, period and tax basis. | currency units of delayed-capacity contribution/late invoice delay | 0 to 10000000 | Required | 200 |
| invoiceAmount | Customer invoice amount on the selected tax basis. Use one consistent currency, period and tax basis. | currency units/invoice face value on the selected tax basis | 0 to 10000000 | Required | 36500 |
| periodDays | Positive annual day basis used by the funding formula. | whole days/annual funding-cost day-count basis | 1 to 366 | Required | 365 |
Late Payment Cost: funding cost
The total combines funding, administration and an explicit user-entered capacity cost.
Formula summary
- Primary formula
- funding cost + administration cost + delayed-capacity contribution
Data used here
- The estimate uses your inputs and the general business formula documented in the methodology.
Decision checks
Stress-test the decision
Retest longer delay and a lower or zero delayed-capacity contribution.
When this estimate can be misleading
- All balances, rates, timing and classifications are user-entered assumptions or records.
- Use one consistent currency, reporting period and indirect-tax basis.
- This does not forecast collection performance, establish a legal fee or provide accounting, tax, legal or financial advice.
- The total combines funding, administration and an explicit user-entered capacity cost.
Educational estimate, not advice. See all assumptions & limitations →
Related reading
Guides to interpret the decision and its assumptions.
- How Late Payments Affect Cash Flow and Pricing
Trace a payment delay through dated cash, explicit costs and commercial options without assuming a universal pricing response.
Read guide - The Cost of Offering Longer Payment Terms
Compare delayed cash, incremental days and a user-supplied funding assumption before changing payment terms.
Read guide
Frequently asked questions
How do I measure the cost created by one late customer payment?
Use the result to improve payment terms and follow-up, not to assert a legal fee.
Which planning assumptions should I stress-test?
Compare a plausible alternative scenario and verify the decision-critical assumption that changes the plan most.