30 day term for Invoice payment
Discussion
Following on from my Contract to do nothing thread, the Co my contract is with stated they allow 30 days for invoices to be paid.
The 30 day period expires this Saturday and despite me trying to get an idea from them as to how its progressing (pitched as friendly questions rather than getting short with them.) I am not getting any reply or a reply that doesn't answer my questions.
My question is then, how do I go about chasing them come Monday morning next week? I have read some stuff about how I can charge interest on the late payment too, is this correct? At what point are they liable to pay me interest on the total?
The 30 day period expires this Saturday and despite me trying to get an idea from them as to how its progressing (pitched as friendly questions rather than getting short with them.) I am not getting any reply or a reply that doesn't answer my questions.
My question is then, how do I go about chasing them come Monday morning next week? I have read some stuff about how I can charge interest on the late payment too, is this correct? At what point are they liable to pay me interest on the total?
Hi Dave
30 days seems extraordinary. Are you working through an agency or direct with the client? If you are working with the client then 30 days is understandable, but its always worth giving them a nudge a few days before reminding them that your invoice is due. If its an agency then most have 7 day terms on contractor invoices. After all, its part of the service.
30 days seems extraordinary. Are you working through an agency or direct with the client? If you are working with the client then 30 days is understandable, but its always worth giving them a nudge a few days before reminding them that your invoice is due. If its an agency then most have 7 day terms on contractor invoices. After all, its part of the service.
Im actually in the role via a Consultancy co. so its more a B2B situation than a regular contractor/agency setup.
Its the first time I've worked like this, previously I've always had agencies that pay either on the day of Invoice of the next day!
I've sent an email to the Customer Account Manager who is essentially my Line Manager asking if I will be notified when payment is made etc. This got no reply.
I've forwarded it on to one of the admin girls so will give her until lunch today before calling her.
Its the first time I've worked like this, previously I've always had agencies that pay either on the day of Invoice of the next day!
I've sent an email to the Customer Account Manager who is essentially my Line Manager asking if I will be notified when payment is made etc. This got no reply.
I've forwarded it on to one of the admin girls so will give her until lunch today before calling her.
If its a business to business relationship you can charge interest at 8% above base rate, under The Late Payment of Commercial Debts [Interest] Act 1998 as amended and supplemented by the Late Payment of Commercial Debts Regulations 2002.
You are also entitled to statutory compensation under European Directive 2000/35/EC :
up tp £999.99 = £40.00
£1000 - £9999.99 = £70.00
£10k or more £100.00
If not a B2B debt you may still be able to charge 8% interest flat under the County Courts Act, if it ends up there.
If they dont play ball a pretty hard nudge can be used HERE
You are also entitled to statutory compensation under European Directive 2000/35/EC :
up tp £999.99 = £40.00
£1000 - £9999.99 = £70.00
£10k or more £100.00
If not a B2B debt you may still be able to charge 8% interest flat under the County Courts Act, if it ends up there.
If they dont play ball a pretty hard nudge can be used HERE
Hi James,
Thanks for that. I had found mention of the statutory compo but hadn't realised I could chage interest on it too.
How is the interest applied? And when does it become applicable? (i.e. can I charge it as soon as we get to day 31 or do they need to be late by a certain period?)
Dave
Thanks for that. I had found mention of the statutory compo but hadn't realised I could chage interest on it too.
How is the interest applied? And when does it become applicable? (i.e. can I charge it as soon as we get to day 31 or do they need to be late by a certain period?)
Dave
Although you can charge interest, the typical approach to this is to simply hassle the accounts department. Get the name of someone dealing with it and phone them frequently (not email). You'll soon get a sense of what their real payment policy as and the degree to which you hassle will determine where you are in their queue.
Some accounts departments won't pay until they get phone calls. Some won't pay until you issue a statement. In my experience your payment terms rarely dictate when they plan to pay you.
Some accounts departments won't pay until they get phone calls. Some won't pay until you issue a statement. In my experience your payment terms rarely dictate when they plan to pay you.
Thanks Ted. Would you say I'm doing the right thing by getting on the case prior to the 30 day limit that they stated? Just to try and speed things up as it were. Or should this be left until next week?
A contact for someone in the Accounts Dept. is what I am trying to get out of them with no success!
A contact for someone in the Accounts Dept. is what I am trying to get out of them with no success!
I fretted over my approach to this for a long time before I understood the game you have to play. I didn't understand that it wouldn't affect people's desire to do business - it's simply what accounts departments do.
The thing to remember is that you're not being rude asking for your money. You can have a polite conversation with the accounts department on a regular basis. You'll probably get fobbed off with some standard replies, but that's just part of the game.
Just ring them up at 31 days and ask to speak to someone regarding an overdue invoice. They'll give you some bull and you have a pleasant conversation and then ask them for their name and thank them for their help.
Then you just chase again - if they said the end of the week then you ring at the end of the week etc. etc. Just keep at them until they give away what their system (60 days/wait for statement/phone call etc) is or they get embarressed/bored of you calling them. If their policy turns out to be 60 days then that's the point you take it up with whoever employed you.
I had one client who simply wouldn't pay until I rang up. At that point the chappie in accounts would say (time after time), "Ah, hi Ted - funnily enough I've got your cheque on the desk waiting for a signature. I'll get that sorted today." It would turn up within two days every single time.
The thing to remember is that you're not being rude asking for your money. You can have a polite conversation with the accounts department on a regular basis. You'll probably get fobbed off with some standard replies, but that's just part of the game.
Just ring them up at 31 days and ask to speak to someone regarding an overdue invoice. They'll give you some bull and you have a pleasant conversation and then ask them for their name and thank them for their help.
Then you just chase again - if they said the end of the week then you ring at the end of the week etc. etc. Just keep at them until they give away what their system (60 days/wait for statement/phone call etc) is or they get embarressed/bored of you calling them. If their policy turns out to be 60 days then that's the point you take it up with whoever employed you.
I had one client who simply wouldn't pay until I rang up. At that point the chappie in accounts would say (time after time), "Ah, hi Ted - funnily enough I've got your cheque on the desk waiting for a signature. I'll get that sorted today." It would turn up within two days every single time.
_daveR said:
Hi James,
Thanks for that. I had found mention of the statutory compo but hadn't realised I could chage interest on it too.
How is the interest applied? And when does it become applicable? (i.e. can I charge it as soon as we get to day 31 or do they need to be late by a certain period?)
Dave
Interest is charged from the date the invoice became due (31 days) until payment, or until Judgement, or until the judgement is paid.Thanks for that. I had found mention of the statutory compo but hadn't realised I could chage interest on it too.
How is the interest applied? And when does it become applicable? (i.e. can I charge it as soon as we get to day 31 or do they need to be late by a certain period?)
Dave
The interest calculator will work out the interest as base rate fluctuates over the course of being paid.
I would recommend that if you are on 30 day terms you ring up on day 21 just to check that the payment is in the pipeline. Chasing payment should technically not be needed, if you are on 30 day terms you should be paid then. Constantly chasing is expensive from a time point of view, however in the real world is all to needed. The UK is the worst for this by a long shot when compared to the rest of the EC.
30 day terms actually mean "you can start hassling us after 30 days" and if you hassle enough you might get paid in 60.
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