Late Payment, Statutory Invoice and Invoice Templates

[Solidec]

What Invoice format/wording do people use to state that statutory interest will be charged for late payment of invoices they send to their client?

I am operating in a B2B capacity with my existing client and we have contractually agreed a payment date for services rendered of 30 days after the last day invoiced.

My client has failed to pay me on time for the second month running and I am conscious that if i don't factor in some consequences, this could turn into a more than infrequent habit.

I had a look through the at Late Payment of Commercial Debts (Interest) Act 1998
And then used the Statutory Interest Calculator

One is due 1% for every 4 weeks the client is late with payment according to the calculator above.

How would one best go about informing the client that beyond just being a nuisance in financial planning to my company, there is a legal prescedent for me to begin charging without coming across as overly agressive? Any samples of Invoice wording or letter templates in dealing with such issues?

Thansk in advance

Solid

[Hex]

This site may be of interest: http://www.payontime.co.uk/

[sathyaram_s]

If you are used to the payment terms of the agencies, no doubt, it is difficult to get used to direct client payment terms ...

I understand how important it is to get the payment on time, but at the same time , take care not to spoil your relationship with the client .. If they always paying in 45 days ,then just ignore it ... AFAIK, this is quiet common. It could be that their internal process takes 45 days .. Also, talk with other suppliers about their experiences. If it is similar, then there is very little you can do to change it .. If your client is unlikely to go insolvent, then you have less to worry about the 'safety' of your money ...

It may be a good idea to look at the payment authorization chain and identify the weakest link .. Build a good relationship with them and for every invoice you raise, chase them up to get it autorized..

For you next project, factor the payment delay into the rate ... Say, add 3% to the rate, set the payment terms to 45 days and offer a discount of 3% if the invoice is paid within 30 days ...

Here is an invoice I received from a legal consultant:

xxx service - Manager 200/hr 2 hrs 400
xxx service - Associate 100/hr 6 hrs 400
Subtotal 800
1% finance charge if not paid in 30 days 8

Total 808

You may want to consider something along these lines ..

http://www.businesslink.gov.uk/bdotg...cId=1074002362

gives practical as well as legal info

Good luck

What Invoice format/wording do people use to state that statutory interest will be charged for late payment of invoices they send to their client?

I am operating in a B2B capacity with my existing client and we have contractually agreed a payment date for services rendered of 30 days after the last day invoiced.

My client has failed to pay me on time for the second month running and I am conscious that if i don't factor in some consequences, this could turn into a more than infrequent habit.

I had a look through the at Late Payment of Commercial Debts (Interest) Act 1998
And then used the Statutory Interest Calculator

One is due 1% for every 4 weeks the client is late with payment according to the calculator above.

How would one best go about informing the client that beyond just being a nuisance in financial planning to my company, there is a legal prescedent for me to begin charging without coming across as overly agressive? Any samples of Invoice wording or letter templates in dealing with such issues?

Thansk in advance

Solid

[ryebank]

That calculator is well out of date - Late Payment rules are 8% over BoE base rate - long time since that was 4%! Should be 5.75% + 8% now = 13.75% p.a. or about 1.15% pm - if you are sure they will pay it is worth leaving it with them as you won't get a better rate in any bank!

I have successfully claimed such fees in the past by quoting the amount in chase letters. It might affect work you get from them in future though so weigh that up

[Solidec]

Trying not to sour the relationship with the CFO who signs off on most of this. CLient is a smallish company and everyone knows everyone else face to face.

Decided that if it happens again will start sending chaser invoices with interest penalties but for now will let them off to maintain a good working relationship. Been working on projects with them for over 2 years across a range of locations UK wide so they haev been good in providing me with contracts and I see no reason this won't continue.

Thansk for the advise, confirmed my initial thoughts on the mater.

[chef]

i'm in exactly the same position.

payments terms are invoice weekly, paid 30 days later

first invoice was due by yesterday, have received an email today saying that payment will be made next week due to lack of signatories (which i know is a lie). Have just sent them an email stating that unless payment is made by this Friday (when next invocie is due) then I will charge late payment compensation (£70 as over 1k) along with interest accrued up to invoice date.

we will see..

[NotAllThere]

One nugget of advice. If the invoice is £1000, and the admin fee and interest gets to, say, £100, and then you receive payment of £1000, the interest and admin fee gets paid off first, so they still owe you £100 of the original invoice. Which means you can continue to charge interest, or take them to court over it etc.

[Bluebird]

also you might like to inform them that they are in breach of contract - as such if you do not get funds in your bank a/c within 48 hours, you will seek to negotiate going through another agency with the same client.

That should focus their minds.

ps - Name and shame ?

[NotAllThere]

I think we're talking B2B experiences here; threatening to switch clients might not work.