Late payment

[Mustang]

What is the procedure and terms if a client is late in paying? My assumption is to do the following:

1) I inform them that the payment is now due and give them a few more days to pay.

2) If they haven't then paid state that they are now x days overdue and interest of y% per day will be charged.

Questions:-

* What interest percentage do I charge?
* Do I issue a seperate ivoice for the interest?
* How much beyond the 30days should I wait before I take further action?
* What further action would that be other than terminating the contract?

All advise greatly received.

[tim123]

The answers can be found here:

www.payontime.co.uk/downl...ldebts.pdf

and they are:

1) In the absence of you having a different figure in your contract, base rate plus 8% (per year).

2) Yes

3) Up to you, the problem with invoicing before you have actually been paid is that you will not know how many days to invoice for. TBH invoicing them for 7 days interest when they havn't paid the principal is going to be a waste of time. You'll just have two invoices that they aren't paying. Waiting until they have paid you is best. Invoicing for interest is not a way of persuading a non payer to pay the debt, it is a way of reminding them to try harder next time.

4) Why do you want to terminate the contract. Are you worried that they are never going to pay or are they just inefficient? Terminating a contract for late payment is often not sensible and may not be legally justified.

HTH

tim

[Mustang]

Thanks Tim. I will take a look at that site.

Not looking to terminate the contract - just a bit frustrated by them paying late. I am begining to suspect they have cash flow problems of their own but that's no reason to impact my own cash flow.......!! >:

Any other advise from anyone?

[Mustang]

Re: Late payment - 30 days

When people quote 30 days for payment terms do they only mean working days......?!

[sparklelard]

RE; Late Payment 30 days

This is normallly calendar days.

[Freddy3000]

Me Too...

I'm in the same boat - waiting for payment of last months invoice & now it's time to send the next invoice. I get a different excuse from the agency every time I call & I've a sinking feeling that they might be going under.

What have others done in this situation?

At any stage can I just cut my losses, consider the contract null and void and work direct for the client?

Thanks,
Fred.

[malvolio]

Re: Me Too...

At any stage can I just cut my losses, consider the contract null and void and work direct for the client?

Don't know - what does your contract say? That's what it's for, after all...

If there's something in there about voiding it if either party defaults on any of the conditions agreed, then probably you can. I'll bet there isn't such a reciprocal deal, though!

However, if going direct is an option, the client wants to keep you and the agent is messing about, go talk to the client. He can wave much bigger sticks than you, and he can sack the agent when you probably can't.

[Freddy3000]

Hmmmm

Checked the contracted, but unfortunately they weren't dumb enough to include a "if we screw you around you can go direct clause". Things are going well with the client though, so I think I'll take your advice about talking to them about it.

Cheers,
Fred.

[BlasterBates]

Re: Hmmmm

What ever you do don´t allow more than one months outstanding. It usually means the company is about to go under, and then you lose two months. The main thing is hold back the invoice on the following month until payment is in the bank, and inform the client so that they don´t pay any more money.

Go down in person (or send a letter) and demand payment wihin 7 days if they haven´t paid by then terminate the contract forthwith (breach of contract) and sign up to a new agency recommended by the client. Then chase the outsanding monies through the courts.

I would go and check this through a lawyer though, and get him to draft the final demand and contract termination.