Urgent advice needed on unpaid invoice

puglover_3

I did some work for a client and offered a goodwill gesture of a discounted rate of 15% with 14 days payment terms. The bill is 5250+vat so a hefty discount of 1750 was given. The client was due to pay within 14 days of invoice (10th march) and has not paid. He has promised on 4 separate occasions to pay, however for the past 2 weeks has not responded to emails or calls, apparently he is holiday this week and back in office on Monday.


I am now seriously considering using a reputable debt collector who have been successful in the past but will wait until Monday as this will cost me nearly £800 which I cannot claim back.


As this client has not paid within the timescale laid out in my contract can I re-invoice him the full amount of 7k as he has broken the terms?


Can I add late payment charge ( I have a clause in my contract) stating 3% above base rate will be charged after 30 days.


Can anyone help or advise best route forward as this is clearly very upsetting and I need to focus.


Thanks in advance

InsideInsurance

For future clients it may be worth changing your terms so debt recovery is transferable to the client but even if you dont their fees are still less than the discount you had offered.

You dont say what the actual terms of payment are? Ok there is a discount clause for early payment and a increase clause for payments after 30 days but you dont say what the invoice gives as the required payment time? 30 days? 60 days?

Is the client a fully fledged company with multiple employees or just a sole trader/ Ltd but single director/employee?

AbbieCadabra

would this be worth putting on the small business section on here? i'd also try on UKBusinessForum, usually very helpful with that type of query.

Kayalana99

Personally I would send a letter for the full £7,000 + 3% as your contract says.

I.e Due to non payment within the 14 days your discount would not be vailded so you would need to pay £x,xxx + the 3% late payment fee as in our contracts.

We will however give you another 7 days to pay at the discounted rate of £x,xxx

If we do not receive payment by XX/XX/XXXX we will hand this over to our debt collector for the full amount of £x,xxx (including charges) + £800 ( if allowed? ) which is the cost of the debt collector.

Regards,

XXX

Obviously a bit more well worded...but you never know it might work and if it doesn't...send it over. Don't allow them to negoiate for more time just say sorry but as per letter you have untill xx date but might make him realise if he doesn't pay how much more he is going to end up paying..

You could however not even give him the discount but personally I would do this..

puglover_3

InsideInsurance wrote: »

For future clients it may be worth changing your terms so debt recovery is transferable to the client but even if you dont their fees are still less than the discount you had offered.

You dont say what the actual terms of payment are? Ok there is a discount clause for early payment and a increase clause for payments after 30 days but you dont say what the invoice gives as the required payment time? 30 days? 60 days?

Is the client a fully fledged company with multiple employees or just a sole trader/ Ltd but single director/employee?

Many thanks, shall look at Terms. Terms of payment and invoice states 14 day payment. the company is a Limited Company with 6 employees established for 5 years.


Can I re-invoice at the full rate of 7k?

Kayalana99

Not sure if I have mis read thought the discount was based on them paying within 14 days...is it not? Was it an agreed discount before you started work?

puglover_3

Kayalana99 wrote: »

Not sure if I have mis read thought the discount was based on them paying within 14 days...is it not? Was it an agreed discount before you started work?

Yes, my normal terms are 20% but stupidly I agreed 15% as a goodwill gesture. Payment days in my contract and invoice are at 14 days. I was thinking as he has not adhered to payment terms this may make the discount void although I haven't a clause about this in the contract ( will be doing so moving forward)


I like your suggestion but am worried if this will stand up..... Thanks for your advice

Kayalana99

I'm still a bit confused as to your terms but I'll put it another way if your discount is a payment within 14 days discount then of course you can no longer offer the discount and charge the full amount.

But if you took on a job and they said would you do it 15% cheaper and you said yes...you can't then add it back on because they didn't pay within a certain time as you agreed to do it for that price.

puglover_3

Kayalana99 wrote: »

I'm still a bit confused as to your terms but I'll put it another way if your discount is a payment within 14 days discount then of course you can no longer offer the discount and charge the full amount.

But if you took on a job and they said would you do it 15% cheaper and you said yes...you can't then add it back on because they didn't pay within a certain time as you agreed to do it for that price.

Thank you , as I thought.....No, it wasn't a discount if they paid within 14 days, it was agreed upfront. I will be changing my contract to state that any discounts from standard terms will be invalid if invoice is not paid within agreed payment days.

Bantex_2

Have you been to see them yet

Kayalana99

puglover wrote: »

Thank you , as I thought.....No, it wasn't a discount if they paid within 14 days, it was agreed upfront. I will be changing my contract to state that any discounts from standard terms will be invalid if invoice is not paid within agreed payment days.

Personally I would have a better 'scare' in place as well instead of just simply if you don't pay then 3% will be added once... you should say 3% a month or 10% etc.

If I saw 3% it wouldn't bother me if I wasn't in a rush to pay.

I would also still send a well worded letter giving them a date to pay or debt collectors will be sent.