How do I calculate interest on an overdue account?

I have overdue accounts outstanding for a business and I would like to add interest to them, however I was not sure if I take the balance and multiply it by say 3%. Is there another method?
How do I calculate interest on an overdue account?
First of all, do your invoices state that interest may be charged on overdue amounts and also state the annual interest rate?





If not, then you will be hard pressed to actually charge interest as the 'contract' you gave them (your invoice) did not contain this as part of your terms.