Late payments of Invoices by NHS

pardal51

hi all,

OH has recently started providing services to the NHS. She invoices them monthly (low amount) and gives 30-day term for payment. They tend to pay 2-3 months late.

We checked HMRC's website to understand "interest on late commercial payments" and "claim debt recovery costs on late payments"

The interest is negligible (because of the low amount invoiced). However in terms of claiming debt recovery costs (Can charge up to £40 for amount of debt of up to £999):

Questions:

1) In addition to the negligible interest, Is it reasonable to charge 10% (claim debt recovery costs) on late payments? If so how often should I re-send the invoice (weekly, bi-weekly, monthly, etc)

E.g.:
Invoice to be paid on 30Jan at value X
then (after week/month) send another invoice to replace the original charging X + 10% + negligible interest = Y
then (after same period) send another invoice charging Y + 10% + negligible interest = Z; and so on

Would appreciate comments/suggestions

chalkie99

I am surprised by this.

We supply an NHS department and need to send our invoices by post to a different area.

Despite this they are our fastest payers with the money hitting our bank account by direct transfer on the same day they receive the invoice.

Not much use to you I know but perhaps a 'phone call to the accounts dept. asking politely if there is anything you could do to expedite payments might help.

Just make sure you are sending the invoices direct to the accounts address and not to the department that places the order and also ensure a purchase order number abd your bank details for payment are included with the invoice.

Aquamania

pardal51 wrote: »

hi all,

OH has recently started providing services to the NHS. She invoices them monthly (low amount) and gives 30-day term for payment. They tend to pay 2-3 months late.

We checked HMRC's website to understand "interest on late commercial payments" and "claim debt recovery costs on late payments"

The interest is negligible (because of the low amount invoiced). However in terms of claiming debt recovery costs (Can charge up to £40 for amount of debt of up to £999):

Questions:

1) In addition to the negligible interest, Is it reasonable to charge 10% (claim debt recovery costs) on late payments? If so how often should I re-send the invoice (weekly, bi-weekly, monthly, etc)

E.g.:
Invoice to be paid on 30Jan at value X
then (after week/month) send another invoice to replace the original charging X + 10% + negligible interest = Y
then (after same period) send another invoice charging Y + 10% + negligible interest = Z; and so on

Would appreciate comments/suggestions

Whgen running any businbess, one of the key issues is credit control. That means chasing invoices. When push comes to shove in any office, those who shout loudest will usually get highest priority.

So have you actually chased payment? If so how? And what is their response?

The fact you even ask how often you should re-invoice a customer for the same amount suggests (a) you have not chased the payment and (b) you do not understand accounting very well.

In regards to you unilaterally & arbitrarily adding fees to your customer's bill, how would you feel if the roles were reversed?

I suggest you seek professional help with book keeping, and in particular credit control. Without good credit control, your business is doomed to failure.

Stevie_Palimo

Aquamania the Company here may not be in a position to cover an additional employee and the post by chalkie99 seems more applicable to the op, I'd also suggest a call to speak with the right department about speeding these up, I also used to supply Government outlets and found them to be the best payers that I had on the Companies books at the time.

Aquamania

Stevie_Palimo wrote: »

Aquamania the Company here may not be in a position to cover an additional employee and the post by chalkie99 seems more applicable to the op, I'd also suggest a call to speak with the right department about speeding these up, I also used to supply Government outlets and found them to be the best payers that I had on the Companies books at the time.

I think you misunderstand. I never suggested the business takes on any additional employees.

As to the business not affording to take the advice I gave, I would argue the business cannot afford not to take the advice I gave

Stevie_Palimo

Aquamania wrote: »

I think you misunderstand. I never suggested the business takes on any additional employees.

As to the business not affording to take the advice I gave, I would argue the business cannot afford not to take the advice I gave

This part below :-

I suggest you seek professional help with book keeping, and in particular credit control. Without good credit control, your business is doomed to failure.

Partner this with the fact that the OP states his OH which would presume single employed person with low value invoices would suggest not a very large turnover thus paying an outsider any money would prove costly for them and more so when it can be resolved by oneself with ease.

Aquamania

Stevie_Palimo wrote: »

This part below :-

I suggest you seek professional help with book keeping, and in particular credit control. Without good credit control, your business is doomed to failure.

Partner this with the fact that the OP states his OH which would presume single employed person with low value invoices would suggest not a very large turnover thus paying an outsider any money would prove costly for them and more so when it can be resolved by oneself with ease.

As I mentioned above, because of the fact the OP even raises the points he has, I think we will have to agree to disagree on this one

Stevie_Palimo

Aquamania wrote: »

As I mentioned above, because of the fact the OP even raises the points he has, I think we will have to agree to disagree on this one

No problems and I am merely pointing out that as a small Company additional expenses could prove difficult to say the least.

Pennywise

"professional help" as suggested doesn't necessarily mean engaging a book-keeper.

There's lots of help around, i.e. advice from their accountant, advice from a professional debt recovery/control firm, or even just attending a course on credit control (often offered by local chambers of commerce etc).

pardal51

thank you all for the posts.

OH is only starting providing services, and we are talking about a very small amount of money here. In fact she really wanted to know whether (a) she can add this "admin" fee to unpaid invoices and (b) how often she should re-invoice.

thank you all again....

skivenov

Not unless it's in the contract.

Just do what everyone else does when dealing with the public sector and add a third on the quote because you know they'll be late paying and three kinds of a pain in the !!!! to deal with generally.