For businesses and bookkeepers on Xero
Charge interest on overdue invoices, as drafts you approve
Xero does not add interest to late invoices. Creditloom works out the interest from the due date and the payment dates, shows every step of the sum, and prepares draft invoices in Xero for you to approve and send.
Preview free. First 5 drafts free. Then $39 for a 7-day pass or $29 a month. USD, excl. VAT/sales tax. With FOUNDING40 until 30 Nov: $23.40 for the pass, $17.40 for the first month.
- Drafts only: never approved, never sent
- The original invoice is not touched
- Not legal or tax advice: you enter the rate
The real preview, shown with sample data. Opening balance is the balance when the interest starts. After a part payment the interest is worked out in slices, so it is less than balance times days times rate; open the row to see each slice. Nothing is written to Xero at this stage.
Four steps, and nothing is written until the last one
- Choose the rule
A yearly rate on a 365 or 360-day year, a fixed fee per invoice, or the UK late payment rule: 8% plus a reference rate you enter, with the fixed sum if you want it. Set the end date, any grace days and a smallest charge.
- Preview
Creditloom reads your overdue invoices, and if you ask, those paid late. Each row shows the days, the balance, the rate and the total. Untick an invoice, leave out a customer, or change the rate on one row.
- Code the drafts
You choose the account and the tax rate from your own Xero lists, the draft date, the payment terms, and one draft per invoice or per customer. Creditloom preselects neither the account nor the tax rate.
- Create
Type
CREATEand the number of drafts. Creditloom reads each invoice again first, then creates the drafts. You approve and send them in Xero.
The sum is on the screen and on the draft
Simple interest: balance x yearly rate x days / 365 (or 360). The first day is the day after the due date, plus any grace days. The total for each invoice is rounded once, half up, to 2 decimals.
Example. An invoice for £1,000.00 was due on 30 September. £400.00 was paid on 10 October. Interest through 31 October at 8% a year on a 365-day year:
- 1 to 10 October: £1,000.00 for 10 days
- 11 to 31 October: £600.00 for 21 days
- (1,000 x 10 + 600 x 21) x 8% / 365 = £4.95
The line on the draft reads: "Interest on invoice INV-0042 (due 30 Sep 2026): 1 Oct 2026 to 31 Oct 2026, 8.00% a year, simple, 365-day basis, on 1000.00 for 10 days, 600.00 for 21 days." The reference is INT-INV-0042-2026-10-31.
What it leaves out, and says so
Every invoice it reads and does not charge is listed with the reason.
- Closed by a credit note. A balance of zero does not mean someone paid late.
- Figures that do not add up. If the total, the payments, the credits and the amount due disagree, or a payment has no date, it goes to "check by hand" rather than to a guess.
- Prepayments and overpayments. Xero does not show when they were applied, so these go to "check by hand" too.
- Paid on time, not yet due, inside your grace days, or a customer you left out.
Xero’s own query returns only open invoices past the date, and paid ones if you ask for them, so voided, deleted, draft and not-yet-due invoices never reach the sum.
Built for your ledger
- Preview by defaultThe preview only reads. Creating is a separate step you confirm by typing.
- Checked again before writingIf an invoice changed after the preview, its draft is skipped, never adjusted.
- Not twiceA ledger per invoice and period. A later run starts the day after the last one charged.
- Delete for 30 daysOnly what Xero still shows as a draft. Approved invoices are left alone and listed.
Creditloom makes at most 55 calls a minute. If Xero asks it to slow down or the day’s allowance runs out, the run pauses and carries on by itself, and each draft gets its own result. A draft takes about 2 calls.
Run live on 7 November 2026 in a Xero Demo Company: invoices part-paid on or before the due date, paid-late and credit-closed invoices, creating drafts, reading them in Xero and deleting them. A part payment made after the due date has been checked against hand-worked figures in our code tests (an invoice split at the payment date), but not yet live in Xero. An approved draft was left alone, as it should be. That company had no overdue foreign currency invoice, so that case has run only against our test data.
What you allow when you connect
The next button takes you to Xero’s own sign-in page, where you choose an organisation and approve these permissions. Creditloom then opens on the Late interest tab. The preview does not change anything.
- Your sign-in identity. Name and email, plus ongoing access so a run can finish after you close the tab.
- The invoices permission group. Creditloom reads invoices, including the payments and credit notes Xero lists on them. For Late interest it creates draft invoices, and deletes those drafts if you ask.
- Read access to organisation settings. Your accounts and tax rates for the two lists you choose from, and your lock dates.
Creditloom never approves or sends an invoice and never changes an existing one. It asks for no access to contacts, bank data or reports. If you already use Creditloom, Late interest needs no new permission.
Questions people ask first
Does it send anything to my customers?
No. Creditloom creates draft sales invoices in Xero and stops there. You open each draft in Xero, check it, and approve and send it yourself. There is no scheduling and there are no reminder emails.
Which rate should I use?
That is your decision, based on your contract or the law that applies to you. Creditloom does not choose a rate and does not store a table of statutory rates. This is not legal or tax advice. For UK business-to-business debts, GOV.UK sets out the statutory interest rule: 8% plus the Bank of England base rate, unless your contract sets a different rate. It also says to send a new invoice if you decide to add interest, which is what a draft becomes once you approve it.
How is a part-paid invoice worked out?
Day by day on what was still unpaid. Creditloom reads the payments Xero lists on the invoice and splits the period at each payment date. A payment counts at the end of its day, so the payment date itself still carries the old balance. The preview shows each slice: dates, balance, days.
What about credit notes?
A credit note applied to an open invoice comes off the balance for the whole period, so interest is never charged on money you later credited. An invoice closed entirely by a credit note gets no interest, because nobody paid it late. An invoice closed partly by a credit note and partly by a payment goes to the "check by hand" list, with the reason. So does one with a prepayment or overpayment applied, because Xero does not show the date it was applied.
What about foreign currency?
The interest is worked out in the invoice’s own currency and the draft is raised in that currency. Nothing is converted. One draft per customer never mixes two currencies.
Can it charge the same days twice?
It is built not to. Creditloom keeps a ledger per invoice and period. A later run starts the day after the last period charged, and the same period shows as "already charged". If a draft is deleted or voided, those days become chargeable again. A fixed fee or a UK fixed sum is charged once per invoice.
How do I take it back?
For 30 days after a run, choose Delete these drafts and type the confirmation. Creditloom looks at each one first and deletes it only if Xero still shows it as a draft. Anything approved, submitted or paid is left alone and listed, so you can deal with it in Xero.
Who chooses the account and the tax rate?
You do, from the active accounts and tax rates in your Xero organisation. Neither is preselected. Ask your accountant which ones suit late payment interest in your country.
What does it cost?
The preview is free and unlimited, and the first 5 drafts or allocations in each organisation are free. After that it is part of the same plans as the rest of Creditloom: $39 for a 7-day pass with up to 300 drafts or allocations, or $29 a month. Prices are excl. VAT/sales tax. A pass you have not used can be refunded within 14 days.
What does it not do?
No compound interest, no automatic schedule, no reminder emails, no statements, no QuickBooks. If you want reminders, a customer portal and interest in one collections package, a full collections app will suit you better than this.
See what your late invoices have built up
The preview is free and writes nothing. $39 for a 7-day pass, or $29 a month, when you want the drafts.
Founding offer until 30 Nov 2026: the pass is $23.40 with code FOUNDING40, applied at checkout.
Unused pass refundable within 14 days. Prices excl. VAT/sales tax. Not legal or tax advice.