Within Rentec, you are able to automate the late fee process, saving you time and potentially lost revenue. Late fees can be assessed by a flat fee, a percentage of the overdue balance and/or a daily fee.
To begin, you will want to establish the grace period and late fee structure defaults for all new tenants that you add. To do so, head to your Settings tab and then Accounting Defaults.
(This default option applies to new tenants only, to change late fees on your existing tenants follow the instructions below)
The default late payment fee will be charged automatically to your tenant's ledger after the grace period if they have not paid their rent. The grace period considers the day rent is due and after the set amount of days, the late fee will be applied. For example, if rent is due on the 1st, and you have a 4 day grace period, the late fee will be billed on the 5th.
The exception to this procedure is in the case of late fees during the first month of moving a tenant in. If a tenant is late in their first month of tenancy, a manual charge will need to be posted.
If you want to establish a different late fee for one of your new tenants, you can override the defaults within the new tenant screen as you are moving your tenant into the program:
If you want to use the percentage or daily fee structure, or if you need to change your existing tenant's terms, you can toggle these options by heading to the Tenants tab, right clicking on the tenant's name and select Edit Tenant. From the edit screen, you will see a link to Edit the fee structure or adjust the grace period.
Once you've clicked on Edit Fees, you will be taken to this screen where you can adjust the flat fee or enter in a percentage to charge on outstanding balances and/or add in daily late fees beyond the grace period.
NOTE: The daily late fee will only apply to outstanding balances of rent and any other previous month's charges. The daily late fee will not populate if the only balance remaining is a current month's late fee.
If you want to track your late fee income separately from standard rental income, you have the option to create a custom income category. To do so, head to Settings and Setup Categories and create a new income category and call it Late Fee Income. Then, when you are posting an income transaction in your tenant's ledger, be sure to select this income code to separate out the income received.
A note can also be automatically added to tenant invoices and statements explaining that a late fee will be imposed after the grace period ends. To enable this, head to Settings > Program Defaults > go to advanced settings > OK.
Once enabled, the note will be displayed at the bottom of the tenant's invoice or statement as follows:
Note: the following article provides a list of reasons that might cause late fees to not post properly...