Adding interest to outstanding invoices

[chik1]

I wonder if anybody could help?

I have a few clients that seem to go well beyond there payment date. And at times trying to get money is like getting blood from a stone!

In some instances I may have already paid a third party supplier, for example; we design a brochure and a print partner prints it. But in other instances it may all be owed to us.

Is it legal/ethical to send an invoice out after a set overdue date saying that if the bill is not paid within 7 days 10% interest will be added?

I am not really looking at trying to make money on 10% but really just to push them to pay quicker?

Would appreciate some advice!

Many thanks

[gordonthegofor]

You can’t change the T&C on an invoice

But you could be entitled to statuary interest but think hard before doing this if you want to keep the customer

Why not add 10% to their next Quotes and then give them 10% discount for prompt payment

[chik1]

Good idea on the 10%....thanks for your advice Gordon

[YEM]

Hi,

We use a third party to collect outstanding invoices. The company we use is Direct Route and they are very efficient, letting you know at each stage what is going on - the best thing about them, is that upto a certain amount, there is no charge to us as any charges incurred are passed onto the client.

After chasing them (the client) we generally send a letter/statement out stating that if they do not make payment within 5 working days, their details will be passed onto an external collection agency and they may incur extra charges as a result. Usually, we receive payment after this letter but if not we hand it over to Direct and wait for the money.

If you want, I will give you a contact there and you can talk to him about thier services and whether they woul dwork for you

[TechFox]

Please give me contact details for Direct Route

[chik1]

Would love Direct Routes details,

Many thanks

Lorna

[Alpha]

Lorna

You could also use one of the UKBF members ......nicola at admiral collections.

She comes with glowing references from members who have used her services :D

http://www.ukbusinessforums.co.uk/profile.php?mode=viewprofile&u=3614

[chik1]

Thanks Alan,

Will take a look at her site.

Kind regards
Lorna

[YEM]

Hi,

My contact is Daniel Glickman - the number is 0161 7735 178 and his email is dglick@directroute.co.uk

Please mention Lucy at Your Entrepreneur Magazine when you get in touch

Thanks

[BMS]

I use the discount method, all me customers get 5% for paying by BACS/SO on the due date.

Of course the 5 % is added into the margin !

[SDawson]

Agree with all of the above points and working the 'discount' into your margin is always a good idea, better still include extra fees/interest in your terms and conditions from the beginning.

You may want to look at outsourcing the whole collection process so that it doesn't get to a debt collection situation.

this way you can get on with running your business and not have to worry about any chasing at all.

Take a look at our website www.inksmoor.co.uk or PM me and we can chat further and see if we can help.

Sarah

[Admiral Collections]

Hi Lorna

You can charge interest for the late payment of invoices and indeed lots of companies do have this in their terms and conditions, however, very few apply the interest for reasons mentioned in this thread it is hardly a great way to maintain a business relationship and is a sure fire way of losing them.

The main issue isn't just the 10% interest but how to combat the issue arising again with your debtors. I agree with the idea above add it onto next months invoice etc. The main issue is how to combat the problem arising in the future.


I would advise you reward your clients for prompt payment whilst making it clear that overdue invoices in turn will not be tolerated and interest will be applied for every day they fall overdue. If you don't feel comfortable stating this to your clients on the telephone, find someone who does and if I can be of any help don't hesitate to give me a call. I'm not just here to collect debt and kosh people, I give free advice too!

Nic :wink:

[clairemackaness]

I use the discount method, all me customers get 5% for paying by BACS/SO on the due date.

Of course the 5 % is added into the margin !

I hope your customers dont come on here LOL

[Admiral Collections]

I use the discount method, all me customers get 5% for paying by BACS/SO on the due date.

Of course the 5 % is added into the margin !

I hope your customers dont come on here LOL


LOL my thoughts exactly, you never know who lurks behind the scenes reading these posts!

Nic :wink:

[clairemackaness]

There is rumours that someone is an undercover tax man, checking to see how many of us pay our taxes and that Alan Sugar also prowls around on here!

[BMS]

Bugger !!!

Didn't think of that............