Amended or New Invoice when adding interest

Hello Kieran

Thank you for your question.

You should not issue an invoice for the interest and compensation - you put your claim in writing. Interest accumulates on a daily basis, so the longer the debt is unpaid, the more interest racks up. If your claim for interest remains unpaid, then you need to explain to the debtor that interest is continuing to accrue on a daily rate until the interest, compensation AND the invoice amount are paid in full.

If after receiving your claim, the debtor pays the invoice in full (or partially) but not the interest and compensation, then the interest and compensation are reduced first before the invoice amount. This will mean that not all of the invoice has been paid so Interest will continue to accrue on the full amount of the invoice.

So for example


Total invoice = £1,000.00
Total days overdue: = 167 days
Interest rate used: = 8.5%
Daily interest rate: = £0.23
Total Interest owed = £38.89
Compensation: = £70.00
Total owed to date: = £1,108.89

If the Debtor pays the invoice £1000.00. The result will be:

Part payment: = £1,000.00
New total invoice = £108.89
Total days overdue: = 167 days
Interest rate used: = 8.5%
Daily interest rate: = £0.23
Total Interest owed = £0.00
Compensation: = £0.00
Total owed to date: = £108.89

The debtor still owes £108.89 of the invoice so interest will continue to accrue at a daily rate of £0.23p

It is of course your choice as to whether you want to pursue the remainder but the longer it stays unpaid, the debt will continue to grow.

This page of the users guide has more information.

This letters and forms section has a template for making a claim

Don't forget that your claim will include the VAT.

I hope that helps.

Regards

David

Glad to be of help. If you have any other questions, please just ask.

Regards

David