Late Payment Calculator - Great to get payments

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MSE_Martin
MSE_Martin Posts: 8,272 Money Saving Expert
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in Small biz MoneySaving
Many self-employed/freelancers/small businesses face the same problem. You've done the work - yet your corporate clients haven't paid on time.

Yet you have a legal right to charge interest if companies don't pay you...

Use this for your gain

Go to the 'campaign for better payments' late payment calculator

www.payontime.co.uk/calculator/statutory.html

Enter the details and it calculates how much interest you are owed on a statutory basis. This is normally rather a lot as the rate you're entitiled to charge is the base rate plus 8%. Then print out the result and send it to the company who hasn't paid as part of a reminder invoice - this time including the interest.

It's amazing how quickly companies will pay when they realise each days delay is costing them!

Martin

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Martin Lewis, Money Saving Expert.
Please note, answers don't constitute financial advice, it is based on generalised journalistic research. Always ensure any decision is made with regards to your own individual circumstance.
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Comments

  • tru
    tru Posts: 9,138 Forumite
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    Excellent :T

    My boss is always complaining when people pay late, but he does nothing about it except moan to me :rotfl:

    Thing is, the late payments make the bank account overdrawn, then he gets charged, then he moans some more :rolleyes:

    I wish he'd let me get my hands on the finances.
    Bulletproof
  • Kilty_2
    Kilty_2 Posts: 5,818 Forumite
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    Nice one Martin, that might come in handy some day :T:T:T:T
  • adr0ck
    adr0ck Posts: 2,374 Forumite
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    hmmmmmm

    sounds good until you lose business because of it....and believe me you will unless you offer something they cant get elsewhere

    you may find that you suddenly are not competitive anymore as companies add 8-10 % onto your prices to cover possible late payment charges
  • Lawbag_2
    Lawbag_2 Posts: 361 Forumite
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    thats always the way, you charge interest, you will lose the client.

    in my case its preparing statutory accounts, but I wont release them until they have paid. threat of costs from the Inland Revenue are sufficient incentives to pay my accounting bills.
    "See you on the Other Side"
  • ukmonkey
    ukmonkey Posts: 3,024 Forumite
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    troo wrote:
    Thing is, the late payments make the bank account overdrawn, then he gets charged, then he moans some more :rolleyes: .

    Tell him to claim back the charges!

    Take a look at the threads on these forums, or the Consumer Action Group (https://www.consumeractiongroup.co.uk) website that is sponsored and supported by Martin himself!
  • tru
    tru Posts: 9,138 Forumite
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    ukmonkey wrote:
    Tell him to claim back the charges!

    Take a look at the threads on these forums, or the Consumer Action Group (www.consumeractiongroup.co.uk) website that is sponsored and supported by Martin himself!
    I'm working on it :D
    Bulletproof
  • keith234
    keith234 Posts: 164 Forumite
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    excellent post ta
    It's nice to be important but it's important to be nice!

    If u think my post has been helpful, push my 'thanks' button cheers :)
  • markmc999
    markmc999 Posts: 145 Forumite
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    Something to note however is that you do not have to have listed on your origional invoices that you will claim interest if they do not pay on time. This i find really handy as I can send out invoices to people with no "late payment blurb" on it yet whack it on if I need to.

    Have a look at the site Martin listed for all the info.
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  • STATMAN_2
    STATMAN_2 Posts: 1 Newbie
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    In addition to charging interest on late paying customers small companies can also charge an admin fee against other businesses (I don't believe this applies to the general public). I run a small business and as far as I am aware this legislation is best used to try to get customers to pay on time rather than as a punishment for paying late. This is certainly the way we have used the legislation and have found it very effective. On those few occasions where we have actually added the admin fee and interest we have already reached the point of issuing a summons to retrieve our money and so have already decided that continuing to supply was not economically sound for our company.
  • McAzrael
    McAzrael Posts: 917 Forumite
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    Remember you can do it the other way round, by offering a prompt payment discount. As long as the offer is genuine, there is no VAT liability on the difference between the prompt and tardy payment prices. See https://www.hmrc.gov.uk for details.
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