What is the Late Payment Fee Invoice?
To uphold timely payroll processing and compliance with local employment regulations, Horizons issues a Late Payment Fee (LPF) invoice when a client fails to remit payment by the due date of their original service invoice. This invoice is issued in addition to the original invoice and reflects charges associated with delayed payment.
Why Is the Late Payment Fee Invoice Issued?
Late payments can disrupt essential payroll functions and statutory filings, particularly in global employment contexts. The Late Payment Fee invoice helps offset the administrative and financial risks associated with payment delays.
How Is the Fee Calculated?
The LPF is calculated per overdue invoice within each billing group as follows:
1% of the invoice value, or
A minimum of $299 USD,
Whichever amount is greater.
If multiple invoices within a billing group are overdue, they are aggregated into a single LPF invoice for that group.
Example: If a billing group contains two overdue invoices (e.g., one Payroll (PR) and one Service Fee (SF)), the total LPF would be the higher of:
2 × 1% × invoice amount, or
2 × $299 USD.
How Are LPF Invoices Grouped?
LPF invoices are issued per billing group. Each billing group may represent a distinct billing group or currency. Overdue invoices within the same billing group are combined into one LPF invoice.
If a client has multiple billing groups with overdue invoices, they will receive a separate LPF invoice for each group.
Specific Considerations for Supplemental Invoices (SI)
For Supplimental Invoices where the due date is based on the invoice issue date (e.g., an invoice issued on the 15th with net 10 terms is due on the 25th), payment must be made on or before the due date. SI invoice amounts are typically linked to employee payroll and must be settled promptly to avoid delays in salary disbursement.
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