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Late payment fees

  • Member PM.Dip
  • Practice Licence
  • 60 posts
  • # 118168

Hello,

My client would like to put a paragraph on their invoices explaining that late payment fees will be charged at 15%. My client doesn't give any credit terms but would she have to wait 30 days before she could start charging for late payment? Is this ok or do they have to follow the Statutory late payment of commercial debts, which is 8% above BoE base rate, starting once the debt is more then 30 days overdue?

Could anybody help me with the wording? She needs to be paid on time but doesn't want to upset her customers. I was thinking:

[client's business name] reserves the right to charge late payment interest at a rate of 15% on all outstanding debt from day 31. Interest will be calculated and charged daily.

Would payment reminder letters be a better credit control method? I wonder if I say that interest will start being charged from day 31, then all her customers will take 30 days!

Thanks in advance

  • Member
  • Practice Licence
  • 7 posts
  • # 118171

Clair said:

Hello,

My client would like to put a paragraph on their invoices explaining that late payment fees will be charged at 15%. My client doesn't give any credit terms but would she have to wait 30 days before she could start charging for late payment? Is this ok or do they have to follow the Statutory late payment of commercial debts, which is 8% above BoE base rate, starting once the debt is more then 30 days overdue?

Could anybody help me with the wording? She needs to be paid on time but doesn't want to upset her customers. I was thinking:

[client's business name] reserves the right to charge late payment interest at a rate of 15% on all outstanding debt from day 31. Interest will be calculated and charged daily.

Would payment reminder letters be a better credit control method? I wonder if I say that interest will start being charged from day 31, then all her customers will take 30 days!

Thanks in advance


 Hi,

I've recently started doing this, though I have stuck to the guidelines for charging as per HMRC advice, I.e the 8%, and only applied after the initial 30 day terms the client was given to pay.  If Clients are given and accept terms with differing rates to this in advance of doing business with you then you can charge what you like. If you haven't given advance notice, the higher rates could be disputed if a non payer ever got to a court situation. 

hope this hrlps

Louise  

  • Member PM.Dip
  • Practice Licence
  • 60 posts
  • # 118173

>
> Hi Louise,
>

Thank you for your answer. It does help. I will talk to my client and work
out what is best for them. I'm thinking Statutory terms as the invoices are
raised after delivery, so can't be agreed in advance.

Thanks again
Clair

>
>

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