1. Creating a Late Fee Configuration
To automate late fee charges, you must first configure late fees under Organization → Configuration → Late Fees. In this section, you can:
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Create either a flat late fee or a percentage-based fee.
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Set a Grace Period (e.g., 5 days after rent is due) before the late fee is applied.
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Example: If rent is due on the 1st, and a 5-day grace period is set, the late fee will apply on the 6th.
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Configure Net D, which determines how many days the late fee invoice is due.
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Example: If a late fee is posted on the 6th (after the grace period), and Net D is set to 5 days, the tenant has until the 11th to pay the late fee invoice.
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2. Creating a Charge Preset for Late Fees
Before enabling auto-generated late fees, ensure you have the Charge Preset that will be used to bill tenants:
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Go to → Organization → Configurations → Charge Presets → Add Charge Preset.
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Set up the charge preset details:
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Type: Choose the category of charge (Incidental, Lease, etc.).
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Name: Enter a clear description of the charge.
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Amount: Specify the fee amount or percentage.
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Net D: Set the number of days before the invoice is due.
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Account: Choose the GL account the deposit will be registered under.
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Late Fees: Select the Late Fee Configuration from the dropdown list.
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3. Enabling Auto-Generation of Late Fees
To ensure late fees generate automatically, confirm that the Late Fee Configuration is properly assigned within the charge preset:
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Navigate to → Organization → Configurations → Charge Presets.
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Select the relevant charge preset used for rent payments.
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Ensure the Late Fee Configuration is selected in the dropdown menu.
Best Use Cases for Auto-Generated Late Fees
1. Ensuring Consistent Late Fee Application
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Property managers can eliminate manual tracking of late payments by automatically applying late fees based on lease agreements.
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Helps enforce timely rent payments, reducing delinquency.
2. Customizing Late Fee Policies for Different Portfolios
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Allows custom configurations for different properties, such as:
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Flat fees vs. percentage-based late fees.
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Varying grace periods depending on lease agreements.
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Ensures compliance with local and state regulations on late fee policies.
3. Automating Late Fee Notices to Tenants
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Once a late fee is generated, tenants receive an automated notification, improving communication.
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Reduces tenant disputes over late fees by maintaining clear and consistent policies.
4. Integrating with Payment Plans
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Late fees can still be applied even when tenants are on structured payment plans, ensuring revenue recovery.
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Flexible due dates allow landlords to adjust penalties based on tenant agreements.
Common Issues & Troubleshooting
Issue 1: Late Fees Are Not Generating Automatically
Solution:
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Verify that the Late Fee Configuration is properly set under Organization → Configurations → Late Fees.
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Ensure the Charge Preset associated with rent charges has Late Fee Configuration enabled.
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Confirm that the grace period has expired before expecting late fees to be generated.
Issue 2: Late Fee is Not Appearing on Tenant's Ledger
Solution:
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Check if the Net D (due date period) is delaying the charge visibility.
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Ensure the tenant’s rent payment transaction was properly recorded before the due date.
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Verify that the lease type supports automatic late fee application.
Issue 3: Tenants Being Charged Late Fees Incorrectly
Solution:
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Review the tenant’s payment history to confirm if rent was paid before the due date.
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If an exception was granted, manually adjust the tenant's charge to waive the late fee.
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Verify that the grace period and charge preset settings align with the intended late fee policy.
Issue 4: Late Fees Not Displaying in Reports
Solution:
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Check if the correct accounting period is selected in reports.
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Confirm that late fees are assigned to the correct GL account under Charge Presets.
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Ensure the tenant’s lease is active and associated with the correct financial records.