Count from the due date
This is the whole point of the page. An invoice raised forty-five days ago on net 30 terms is fifteen days past due, not forty-five. People who count from the invoice date panic two weeks early; people who forget the terms entirely chase a month late.
Every aging report, every late fee clause and every conversation with an accounts department uses days past due. Using the same number keeps the conversation short.
What changes at each boundary
Under a week, a reminder is enough and is usually all that is needed. Between one and thirty days, a statement works better than another reminder, because it moves the subject from one invoice to a balance. Past thirty, email has stopped working and a call is the next step. Past sixty you are deciding whether to keep supplying. Past ninety you are deciding what the debt is worth.
Late fees and grace
A grace period is not required, but charging a fee on day one of lateness costs goodwill for very little money and usually is not what your terms actually say. Setting the grace days here shows the date a fee becomes fair, and the late fee calculator works out what to charge and gives you the wording for it.
Related calculators
- AR aging calculatorThe balance owed, split by how overdue it is
- Late fee calculatorInvoice Due Date CalculatorThe fee, the letter and the clause
- Chasing an overdue invoiceWhen to remind, when to send a statement, when to call
Questions people ask
How do you calculate days past due?
From the due date, not the invoice date. Take the as-of date, subtract the due date, and the difference is the days past due. An invoice raised 45 days ago on net 30 is 15 days past due.
What are the aging buckets?
Current, 1 to 30, 31 to 60, 61 to 90 and over 90 days past due. That is the set most accounting software and most finance teams use.
When can I charge a late fee?
Once the invoice is past due and any grace period in your terms has run. What you can charge is limited by law in many places, so check the rate against your state or country before you set it.
Should I send a reminder or a statement?
A reminder for the first week. After that a statement usually works better, because it changes the subject from one invoice they might dispute to a balance they have to account for.
What happens past 90 days?
Collection rates fall sharply, so the question shifts from when you will be paid to how much of it you will get. Most businesses stop extending further credit at that point.