You don't need to be an 'investor' to invest in Singletrack: 6 days left: 95% of target - Find out more
Main client of mine has a small number of very overdue invoices (11 months!) and the interest I can claim is substantial (>£1500 to date).
They still owe a very considerable amount but the other invoices are much less overdue. In a away I feel that I should just suck it up as they're a big part of my income, but on the other hand they are a massive company and the interest payable is very insignificant to them - so why shouldn't I claim it.
My question is, if I decide to charge them the interest, should I simply submit a new invoice itemising the interest payable on each overdue invoice? And if they still don't pay these overdue invoices for a further 30 days what about the further interest that would have accumulated in that time?
What makes you think they will pay the interest?
May be time for a different strategy like withholding stuff until payment is made.
My question is, if I decide to charge them the interest, should I simply submit a new invoice itemising the interest payable on each overdue invoice?
Yes, you are making a legal claim for the interest. Each invoice re-issued should itemise the interest charged.
Do you intend to do this say quarterly? Or a n other frequency? If so, make that clear on each invoice.
If it were me I'd be more concerned about getting paid at all than worrying about interest. I'd be on the phone to their accounts department daily until it was paid. I know big companies like to pay fashionably late, but 11 months is taking the piss.
Have you spoken to them about charging interest or are you planning on sending them an inflated invoice out of the blue? I'd perhaps consider warning them that that's what you're going to do if they don't pay within the next 30 days or something.
What makes you think they will pay the interest?
I don't - but I've done work for them for over 15 years and they've always paid the invoices eventually. The difference now is that we've been undertaking a pretty massive, for me, project for a side of the company that I haven't dealt with before (payment comes from a different accounting department).
If I don't charge them the interest then I'll def not get paid it!
If it were me I’d be more concerned about getting paid at all than worrying about interest.
You're probably right.
What makes you think they will pay the interest?
May be time for a different strategy like withholding stuff until payment is made.
They are legally required to pay it. 9/10 times I've found that a letter stating they have 7 days to pay it or you will invoke the rights to interest gets your payment moved to the top of the pile. In the remainder, the only time I've not been paid interest eventually is when the company went tits up - if that is going to happen you want to know sooner rather than later. I wouldn't be 11 months overdue and still doing work for them though.
What you do depends on many factors.
• If the interest along is £1500 this suggest the original invoice were fairly substantial.
• How much of your business does this company represent.
• How far removed accounts are from the people you deal with. Would accounts go back and moan to the buyer or are they so far removed they won't really give a monkeys and pay anyway.
• Were there any queries on the long outstanding invoices.
Regarding invoicing of interest just ask your accountant how they'd like it doing.
Have you been actively chasing payment and what have they said ?
Only asking that , as at a company I worked for previously, the accounts lady there had stuffed around 10 invoices in her bottom drawer, and it wasn't until after she had left that they were found.
During that time ( and this had gone back 10 months) only half of the companies had chased, and issued duplicate invoices to be paid.
Unfortunately for the rest, the company went tits up before they could be paid.