Invoice payment terms if not mentioned in contract

[Wanderer]

That's a really good summary by Hex.

If no credit period has been agreed, then the Act sets a default period of 30 days after which interest can run. This default period does not constitute a statutory credit period. Where no credit period is agreed in a contract, the principal debt will still become due from the moment the goods are delivered or the service performed.

That's interesting! This interpretation of the law seems to say that payment is due immediately if there are no payment terms in the contract. Maybe that's correct but unfortunately you can only charge penalties and interest after 30 days in the absence of payment terms. The actual wording of the act says:

Section 4 (5) In any other case, the relevant day is the last day of the period of 30 days beginning with—(a)the day on which the obligation of the supplier to which the debt relates is performed; or(b)the day on which the purchaser has notice of the amount of the debt or (where that amount is unascertained) the sum which the supplier claims is the amount of the debt

I would just wait and see when the agency pays up (it might be quite quickly so you don't want to go mentioning 30 days) but set the dogs on them if they take longer than that. Also, it's a good idea to invoice weekly to limit the amount of credit that you are extending to the agency.

[MiniMani]

Cheers Hex.

nterest rate calculator if needed: Calculate the interest due on an unpaid debt | Business Link

[psychocandy]

If not specified explicitly in your contract then implicit payment terms are 30 days, see here (and extract below): Late Payment Legislation Provides Interest & Debt Recovery Costs - Pay on Time

"When is a payment late?

Where there is an agreed credit period, and the supplier has agreed, either in writing or orally, a credit period with the purchaser, the payment is late if it is made after the last day of the credit period.

If no credit period has been agreed, then the Act sets a default period of 30 days after which interest can run. This default period does not constitute a statutory credit period. Where no credit period is agreed in a contract, the principal debt will still become due from the moment the goods are delivered or the service performed.

The 30-day default period starts running from the later of the actions:

the delivery of the goods or the performance of the service by the supplier; or
the day on which the purchaser has notice of the amount of the debt. A payment is late once the agreed credit period or the default period has expired."

So, you invoice them and then they have 30 days from the day they receive the invoice to pay it, otherwise you can start charging interest.

Cheers Hex.

[Hex]

If not specified explicitly in your contract then implicit payment terms are 30 days, see here (and extract below): Late Payment Legislation Provides Interest & Debt Recovery Costs - Pay on Time

"When is a payment late?

Where there is an agreed credit period, and the supplier has agreed, either in writing or orally, a credit period with the purchaser, the payment is late if it is made after the last day of the credit period.

If no credit period has been agreed, then the Act sets a default period of 30 days after which interest can run. This default period does not constitute a statutory credit period. Where no credit period is agreed in a contract, the principal debt will still become due from the moment the goods are delivered or the service performed.

The 30-day default period starts running from the later of the actions:

the delivery of the goods or the performance of the service by the supplier; or
the day on which the purchaser has notice of the amount of the debt. A payment is late once the agreed credit period or the default period has expired."

So, you invoice them and then they have 30 days from the day they receive the invoice to pay it, otherwise you can start charging interest.

[psychocandy]

Please don't take this as legal fact, but I would imagine if no payment terms are specified, then the due date is as soon as you invoice. Payment terms are you allowing the client a credit period, and if you don't, there is none.

Payment terms don't mean they'll pay of course. All it really means is that you can't sue for that period. And the late payment legilslation doesn't cut in until after 28 days.

Hmmm. Good point....

[VectraMan]

Please don't take this as legal fact, but I would imagine if no payment terms are specified, then the due date is as soon as you invoice. Payment terms are you allowing the client a credit period, and if you don't, there is none.

Payment terms don't mean they'll pay of course. All it really means is that you can't sue for that period. And the late payment legilslation doesn't cut in until after 28 days.

[psychocandy]

Push for something as short as poss and get it put in the contract before you sign. Or is it too late for that?

Too late. My fault...

[Scrag Meister]

Push for something as short as poss and get it put in the contract before you sign. Or is it too late for that?

[northernladuk]

Standard B2B tend to be 60 or 90 days. I would be very surprised if they had the same one for contractors though. The last two gigs I had tried to push for 45 days and best I could do was 30 days. First one was 7 so it varies greatly and negotiation is the best key.

Are you direct or via an agent. Why not ask the people that handle your contract. There must be some standard that they do for others or some assumptions. The accounts dept won't know what is agreed.

Dont know why they were so stroppy.

Apparently, there was system problem (i.e. some nobhead forgot!).

A bit hypocritical?

[psychocandy]

Yes, I know I should have made sure they were listed in the contract but they aren't.

I understand that I cant now make up payment terms on my invoices now, but wondered if, in law, there was a standard payment term if nothing exists contractually?

If I get a renewal I'll get it added because the accounts dept at the pimps are right awkward tossers. Submitted my invoice a few weeks ago, and just ASKED them how long it normally took to pay and got a stroppy reply back saying that they dont pay immediately, they've got to get timesheets agreed, and what do I expect? I only asked.

Dont know why they were so stroppy. Last month I only had my bank account sorted about three weeks after invoice. I told them details and they promised I'd be paid that week - I wasnt. Apparently, there was system problem (i.e. some nobhead forgot!).