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Late payment cost calculator

In brief

An invoice paid at 60 days instead of 30 leaves a month of revenue sitting at your clients’. With 10,000,000 FCFA invoiced per month, that is 10,000,000 FCFA of cash tied up by the delay alone, and about 1,400,000 FCFA a year if you fill the gap with a 14% overdraft.

How the calculation works

The calculator uses four figures you know: what you invoice to other businesses each month, the number of days your clients actually take to pay, the payment terms written in your contracts, and the yearly rate of your overdraft.

The slider shows the cash freed for every day your clients pay sooner. It is an estimate: it assumes regular invoicing and a 30-day month, and it leaves out costs that are harder to count, such as orders turned down or time spent chasing payments. Nothing you type is saved or sent.

What your clients owe you, VAT included. From a pre-VAT figure, multiply by about 1.19.
Average of your last 20 paid invoices, weighted by amount.
If nothing is written, enter what you allow in practice.
How to measure your actual payment time
  1. Take your last 20 paid invoices.
  2. For each one, count the days between the invoice date and the date the money arrived.
  3. Weight by amount: a 6 M invoice counts more than a 300,000 one.
Actual time = Σ (amount × days) ÷ Σ amounts

Note the slowest clients as you go: that is usually where the money sleeps.

Move the slider: every day of delay absorbed raises the level. At most, your clients pay on the contract due date.
Cash tied up at your clients’
20,000,000 FCFA
Of which, due to late payment
10,000,000 FCFA
Cash freed if your clients pay 15 days sooner
5,000,000 FCFA
Overdraft interest saved per year with these 15 days
700,000 FCFA
Yearly cost of the whole delay if financed by overdraft
1,400,000 FCFA

3/15Averages hide the spread. 60 days on average can mean 12 clients paying at 30 days and 3 at 150. In that case, the lever is not “everyone pays sooner”: it is dealing with those 3 clients. The diagnostic identifies them.

Estimate based on your figures. Not a promised result. Nothing is saved.

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