Charging Interest on Overdue Invoices

**northernladuk** · 8 March 2013, 20:54

Have a look at payontime.co.uk for the best process. It is certainly an idea but see if there is anything you haven't tried on there. Also look up dunning and try that.

**Jessica@WhiteFieldTax** · 8 March 2013, 21:33

Yes; do a separate invoice with narrative. No vat on invoice.

Also remember you can add on statutory recovery costs - its not a lot, £40 on up to £1K, £70 on up to £10k.

**psychocandy** · 11 March 2013, 11:17

6 months! I think I would have escalated things before then....

**yusefkerr** · 11 March 2013, 16:33

Thanks for your help, advice and support, the client is now saying that they "should be in a position to pay the balance by mid April", so I think I'm going to send them the statement of interest and also offer to waive the interest if they pay within 7 days.

If I send them an invoice showing the interest due up to today (11th March), when should I update the amount and how should this be done? For example, should I invoice them for 31 days more interest on 11th April?

My big concern is that they're going to wind-up the business and I won't receive anything. Does this sound likely for an 18-month old start-up employing around 10 people, or am I being paranoid?

**northernladuk** · 11 March 2013, 16:43

Originally posted by yusefkerr View Post

Thanks for your help, advice and support, the client is now saying that they "should be in a position to pay the balance by mid April", so I think I'm going to send them the statement of interest and also offer to waive the interest if they pay within 7 days.

If I send them an invoice showing the interest due up to today (11th March), when should I update the amount and how should this be done? For example, should I invoice them for 31 days more interest on 11th April?

My big concern is that they're going to wind-up the business and I won't receive anything. Does this sound likely for an 18-month old start-up employing around 10 people, or am I being paranoid?

Holy crap! I would be more than paranoid in that situation. I think I would be bricking it. I hope it isn't a lot. I don't think there is any hard figures about startups failing but a quick search shows a few people putting it at around the 80% mark don't make it to the end of year 2.

I would certainly be thinking about forgetting the interest added option, or at least carry it on but don't put any faith in it. If you can, skip that and go straight for the legal option. I am thinking if they have cash flow problems they will be paying prioirty clients first and you are not one of them at the moment. If there is a legal case hanging over them it might push you in to the priority list... if everyone else hasn't already had that idea.

Time to go in big and hard me thinks.. How, I don't know, but start investigating it.
Safe collections post on here and haven't appeared on this thread yet but I would certainly be thinking about giving them, or someone similar a call. Home

Edit : If SafeCollections do read this thread you might wanna look at your meta tags or whatever it is that says 'Home' lol

**yusefkerr** · 11 March 2013, 19:36

Well, thanks again Northernladuk. I've just issued them with a notice of interest due. However, I'm not going to wait and I now just want the fastest way of retrieving the original balance.

They've said that they do intend to pay "as soon as [they] are able", but they seem to be relying on current investment negotiations/April VAT return to pay me. I am indeed worried that they'll go under before I get paid.

What are the pros/cons between small claims and a debt-collection service? Which is likely to be faster? My instinct is to go through the small-claims court but there seems to be a cutoff at £5000, after which the process changes. They owe me just slightly more than that based on a number of different invoices.

Is there any point in limiting my claim to £5000 in an effort to push it through faster?

**northernladuk** · 11 March 2013, 20:04

Don't want to be rude but f I was owed over 5k by a company I think is about to go under I would be too busy on the phone taking advice from specialists to be posting gormless questions on a free forum.

**yusefkerr** · 11 March 2013, 20:18

I don't think there was anything gormless about my question. Today is the first day I've actually got them to admit there might be something wrong with their finances and I'm following things up through Citizens Advice as well, to try and find a pro-bono lawyer.

Does anyone else have any advice?

**Safe Collections** · 12 March 2013, 10:33

Originally posted by yusefkerr View Post

I don't think there was anything gormless about my question. Today is the first day I've actually got them to admit there might be something wrong with their finances and I'm following things up through Citizens Advice as well, to try and find a pro-bono lawyer.

Does anyone else have any advice?

So to clarify, you have invoices outstanding totalling over £5k from roughly six months ago. The client has only just confirmed they have cash flow "issues" and are "hoping" to pay you in another 30 days?

You need to start being realistic. The chances of you ever receiving your funds are declining every day that you wait. We can guarantee you that other creditors are getting paid, either because they are essential to the debtors business or because they are taking strong recovery action.

If this company had any serious intention of paying you, they would have done so by now!

We strongly recommend that you read our piece on Contractor "how contractors can get paid if all else fails" this should answer a majority of your questions on how to move forward.

But please, whatever you do, don't delay any longer.

Charging Interest on Overdue Invoices