How do i deal with late payments or non payments from account customers

[miltonkeynestaxi]

I would like some advice on how to deal with non payment and settlement of an account, from account holders when waiting patiently like over 30 days for a balance on the account to be settled for services provided.
I have had no luck with being settled up for transport provided, at the start of March,i invoiced at on 1st April and now we are on 8th May and after communications with the customer, having agreed this should have been paid last week,i still have not recieved there remitance advice payslip.
Can any one please let me know my steps i should take next.

 

[simon field]

Put them on proforma in future?

Can you put them on stop, ie is there any work pending with them?

 

[OvcaX]

We have an automated system
Day due + 1 - We send a copy of invoice with kind reminder
DD + 10 - We send first notice
DD + 20 - We send second notice + Somebody will give them a acall
DD + 30 - We send third notice + Somebody will evaluate further steps (a this step is out of automated system)

Usually the DD + 30 makes them pay as it's quite rough written.
As is an automated system the client has nobody to be angry at.

 

[miltonkeynestaxi]

There is no work pending or being done at the moment, but it is with a University and you dont expect this kind of treatment from them.Its been some time since the month of March and i have been told today through the last communication recieved today, that its still awaiting aprooval on payment for March."What".How can this be,all this time and they say they are aware of my invoice at the transport dept,who has to aproove it for payment and its still sitting around.

 

[Scott@KarmaContent]

Unfortunately I think this is one of the drawbacks to working with the public sector, it can be like pulling teeth. Some institutions are so inefficient it's unbelievable.

 

[miltonkeynestaxi]

Unfortunately I think this is one of the drawbacks to working with the public sector, it can be like pulling teeth. Some institutions are so inefficient it's unbelievable.

Yes you are right and they like to keep you in the dark as long as possible.Thanks for reply.

 

[vvaannmmaann]

Not sure if this works or may backfire on you,but I have read about going onto a late paying customers facebook/twitter page etc and asking them for payment that way...........

 

[Big G]

Appoint a really really good debt recovery company that can chase up late payments and supply credit control services too.

 

[Darryl Wright]

Add interest to late payments and admin charges to every letter/email after to initial 30 days, I find that helps with me. Because nobody likes to pay more than the original price

 

[Vectis]

State your payment terms clearly when quoting. Make it clear in your T&C that you charge interest and how much. State it on the bottom of the invoice and all correspondence. And follow it up by charging it.

 

[roydmoorian]

Invoiced April 1st on monthly account due by end of May unless specifically detailed and agreed .

Why not invoice weekly ? And it is a good idea to invoice every job on a seperate invoice so that a query on one job only holds up one invoice not a whole months worth.

That is why you can't run a business without a certain amount of working capital (or an overdraft).

 

[MOIC]

Don't give credit if you can't afford to take any knocks, or if you do not have the manpower or system in place to chase and recover what's outstanding.

You will eventually come unstuck with bad payers which could have a detrimental affect on your cash flow and ultimately your business.

 

[obscure]

Have you worked with this client before and did they pay previous invoices promptly?
What are your stated payment terms?
What are their normal payment terms?

I ask because it is not uncommon for large companies and organisation to require 30, 60 or even 90 days credit and to just assume that you will know this. Unless you/your terms and conditions specifically address the issue of payment terms the org will just pay in their own damn time.

If payment terms have been specified in the agreement and still not met then I would agree with the above poster who suggested adding late payment interest. See https://www.gov.uk/late-commercial-payments-interest-debt-recovery for the law on this.

 

[Ian J]

There i have been told today through the last communication recieved today, that its still awaiting aprooval on payment for March."What".How can this be,all this time and they say they are aware of my invoice at the transport dept,who has to aproove it for payment and its still sitting around.

Find out the name of the person who needs to approve the invoice and then contact him directly and ask him if there is a problem as the account should have been paid by now and once he knows that you've got his name he might get his act together both now and in the future.

 

[miltonkeynestaxi]

Thanks for your answers.
I have written them another email with demand for payment as my last emails i sent went unanswered by them which i think is rude..
This time i have sent a revised invoice with late payment charge of 10% of the balance put on top.
I have stated at the bottom of the invoice t&c 30 days from date of invoice to avoid late payment charges.
Is this fair and right.

 

[miltonkeynestaxi]

Yes worked with the client for about 2 years.
They have paid promptly before, some times 2 weeks after a invoice has been sent.
They stated to me 30 days payment terms which i do not mind at all.

 

[miltonkeynestaxi]

I have stated this on the invoice now about T&C.They have never done this to me before and always paid by 2 weeks or before 30 days of which they stated to me.So now i think it is a good idea to keep that stated on the invoice what pc has said

 

[Ian J]

I have stated this on the invoice now about T&C.They have never done this to me before and always paid by 2 weeks or before 30 days of which they stated to me.So now i think it is a good idea to keep that stated on the invoice what pc has said

Whilst it's always a good idea to have terms and conditions on an invoice they aren't legally binding as an invoice is rendered after the service has been performed and you can't impose conditions retrospectively.

 

[obscure]

This time i have sent a revised invoice with late payment charge of 10% of the balance put on top.

Did you previously specify the 10% late payment charge in your contract or T&C? If not what you have just done is not legally enforceable. You can't apply additional charges after the fact and, if you had read the link I posted, you would see that the maximum you can charge is 8% plus Bank of England base rate for Business to Business transactions, which is currently 0.5% - giving a maximum of 8.5%.

You can add charges for the cost of debt collection but again those are limited by legislation and clearly detailed at the site I linked to.

 

[obscure]

Did you previously specify the 10% late payment charge in your contract or T&C? If not what you have just done is not legally enforceable. You can't apply additional charges after the fact and, if you had read the link I posted, you would see that the maximum you can charge is 8% plus Bank of England base rate for Business to Business transactions, which is currently 0.5% - giving a maximum of 8.5% (unless you have previously agreed a higher % in your contract).

You can add charges for the cost of debt collection but again those are limited by legislation and clearly detailed at the site I linked to.

 

[Ian J]

It is all down to the business specifics, but you can always ask for money in advance, can't you?

No. I doubt whether any large organizations would pay cash up front for taxis and if anyone were to suggest it they would just move to one of the many other taxi firms

 

[InternetMarketingPlatinum]

For a start - suspend work immediately and/or discontinue service until overdue payment is made.

 

[Major_Grooves]

You don't actually need to specify that you will charge late fees and interest as they are statutory. Even is a £5 invoice is paid 1 day late, then technically you could charge them the £40 compensation (plus a tiny amount of interest). I know someone that has done this and claimed thousands for lots of late paid small invoices.

Another thing to note is that if you have not explicitly agreed payment terms, then the legal default is 30 days, regardless of what the customer later tells you.

I'm not sure if Universities count as "public bodies" - probably not, but public bodies are meant to pay within 15 days now I think.

 

[obscure]

You don't actually need to specify that you will charge late fees and interest as they are statutory.

Yes and no. If you charge the statutory % then it doesn't need to be specified in your T&C or contract. However, the amount the OP is proposing to charge is above the statutorily defined level and therefore must be agreed with the client in advance (in the contract or in T&C that they accepted).