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30 days net month question

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10 months 1 week ago - 10 months 1 week ago #3748 by Momentum
Hi Guys
I have just noticed something on the Web Page

payontime.co.uk/the-late-payment-legislation-provides-interest-and-debt-recovery-costs#arrangements

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What happens if there is no agreed credit period but the purchaser usually pays at the end of the month following the month in which the invoice is received?
Some purchasers and suppliers have a long-standing relationship in which this kind of payment arrangement has become standard practice. In these cases, the credit period is considered to end on the last day of the month following the month in which the invoice is received. Interest starts to run on the next day.

Where either:

the purchaser is dealing with a new supplier; or
there is any other reason to doubt whether this kind of arrangement can be regarded as established practice between the supplier and purchaser

the purchaser should ensure that there is an agreed credit period - otherwise the default period of 30 days might apply.
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Could someone point me to the appropriate section in the Act which states this point - A always believed the default was 30 days from date of invoice unless agreed by both parties. This appears to allow the one practice of "Net month" if that is how you have always paid.

Kind regards
Dave

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10 months 1 week ago #3749 by j.salmon@cpa.co.uk
Hi Dave,

Thanks for pointing this out. This bit on the site needs to be deleted as it isn't correct.

This may date back to some of the older legislation but it certainly isn't in line with the latest act.

As you say, in the absence of agreed terms, then the default is 30 days from the due date per the latest legislation.

At present we are in the process of rebuilding/updating the site and hope to launch soon as most of this site is written in quite an historic form that is difficult to edit.

Once that is done we are going to be editing and correcting some of these incorrect and out dated parts.

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