Fixed Compensation

    Charge Late Fees Automatically

    Apply fixed compensation charges of £40, £70, or £100 on every overdue invoice — and post penalty invoices to Xero without lifting a finger.

    Your legal right under the Late Payment of Commercial Debts (Interest) Act 1998. AutoSettle enforces it automatically.

    Fully customisable. Use the statutory £40 / £70 / £100 tiers, override with your own amounts, or disable late fees entirely — configured in Settings › Penalties & Interest.

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    XeroSyncs to Xero

    Fixed Compensation Tiers

    Up to £999.99
    £40

    £750 invoice → £40 compensation

    £1,000 — £9,999.99
    £70

    £4,200 invoice → £70 compensation

    £10,000+
    £100

    £25,000 invoice → £100 compensation

    UK Law

    Late Payment of Commercial Debts (Interest) Act 1998 — compensation applies per invoice, not per debtor.

    You're in full control.

    The figures below are the statutory UK defaults. Inside AutoSettle every workspace can set a custom annual interest rate, override the £40 / £70 / £100 compensation tiers, or turn late fees or interest off entirely — selectively per debtor or across the whole workspace.

    One overdue invoice. One automatic charge.

    For every overdue B2B invoice, you're entitled to a fixed compensation charge. AutoSettle applies it, creates the invoice, and posts it to Xero.

    Auto-calculated

    Invoice value determines the tier. AutoSettle selects the correct charge automatically — £40, £70, or £100.

    Invoice created

    A penalty invoice is generated with full references — linked to the source invoice, debtor, and overdue period.

    Synced to Xero

    The penalty invoice is posted to your chosen revenue account in Xero. Multi-org mapping supported.

    See exactly what's charged

    Each penalty invoice shows the full breakdown — original debt, compensation tier applied, and the total penalty. Combined with statutory interest if enabled.

    Debtors see a clear, legally-backed penalty — not an arbitrary charge. This incentivises faster payment on future invoices.

    Per-invoice calculation — not averaged across debtor

    Combined with statutory interest in a single penalty invoice

    Full audit trail with source invoice references

    Debtor name, amount, and overdue period clearly stated

    Penalty Invoice Preview

    PEN-0042

    Apex Digital · INV-1042

    Original debt£4,200.00
    Days overdue67 days
    Fixed compensation (£1k–£9.9k tier)£70.00
    Statutory interest (11.75% × 67d)£90.55
    Total penalty£166.24

    Posted to Xero → Interest Income account

    Multi-Invoice Penalties

    INV-1042

    £4,200 · £1k–£9.9k tier

    £70

    INV-1038

    £800 · Under £1k tier

    £40

    INV-1051

    £12,400 · £10k+ tier

    £100
    Total compensation£210.00

    Compensation applies per invoice

    Fixed compensation is charged per overdue invoice, not per debtor. A debtor with 3 overdue invoices? That's 3 separate compensation charges. AutoSettle calculates each one individually based on the invoice value.

    This is your legal entitlement under the Act — and a powerful incentive for debtors to pay on time.

    Stop absorbing the cost of late payments

    Apply the late fees you're legally entitled to — automatically.

    Frequently asked questions

    Related guides

    Penalties Overview

    How AutoSettle automates all UK late payment penalties end-to-end.

    Statutory Interest Explained

    How 11.75% p.a. interest accrues daily and is posted to Xero automatically.

    Your legal right. Enforced automatically.

    Fixed compensation charges on every overdue invoice — calculated and posted to Xero.

    14-day free trial · Built for Xero users · Cancel anytime