Definition
A grace period is a short window after the due date during which a late payment is accepted without penalty. For example, an invoice due on the 30th with a 5-day grace period will not incur a late fee until the 5th of the following month. Grace periods are a courtesy, not a change to the due date.
Grace period in practice
Grace periods reduce friction with clients whose payments are delayed by bank processing or internal approvals. State them clearly so the client knows the fee is real but fair.
Frequently Asked Questions
Does a grace period change when an invoice is overdue?
No. The invoice is still overdue the day after the due date. The grace period only delays when a late fee or interest starts to apply.