Late payment fees

I have a few questions which I am hoping someone can assist with.

I am having some difficulty with timely payment on recurring invoices for professional services. Even after follow-up, I am experiencing such things as remittance advice for BACS payment being received with no reference, and funds arrive quite some time later...

Contract makes explicit reference to Late payment legislation in respect of overdue invoices, and provides option to cease services if falls more than 14 days past due.

I am keen to apply statutory charges to 'dis-incentivise' what seems likely to become habit.

My questions:

1. Would it be considered either reasonable or legal to apply statutory charges to both paid-up invoices, as well as the currently pending one?

2. (a) What terms then apply to a (modified) invoice? ie. do 30 days apply to remittance of statutory amounts despite the original invoice being overdue?

(b) Can the application of statutory charges be raised as an invoice query after the due date?

Any help to detremine standing will be much appreciated.

You may apply Statutory Charges on paid and unpaid invoices up to six years after the invoice was due so the answer to 1) is YES

Statutory interest and charges apply from the later of completion of service and request for payment. If you had completed your services and raised an invoice, then lets say your client haggled and you reduced your invoice as far as Im aware the stat charges and interest are due from the later of your original invoice and the completion of the services to which that invoice related (Ruttle vs Secretary of State). If this rule did not apply every client would try to stall on the premise that the invoice was wrong.

Not 100% sure what you mean by b). can you give a little more detail.

Hope the above assists.

Yes - very helpful. Much obliged :)

And yes - I should have been more clear but I think you may have in part answered it. Just to recap:

Can the application of statutory charges be raised as an invoice query? Does that query when raised affect the due date of the original oustanding amount? What is recommended practice for notification of outstanding amounts - amended invoice, or new one with statutory fees only?

Again, many thanks for your time.

Spook wrote:

Can the application of statutory charges be raised as an invoice query?

It shouldn't but it often does, in our experience the claim is often just ignored. Ie they pay minus the charges.

Spook wrote:

Does that query when raised affect the due date of the original oustanding amount?

No, the invoice is due when the invoice is due.

Spook wrote:

What is recommended practice for notification of outstanding amounts - amended invoice, or new one with statutory fees only?

There is no recommended practice, we find everyone does it differently. But we would recommend you do not amend/redate and resend an invoice as this is often an excuse to "reset" the payment terms.

Easiest option is to send an invoice for late payment. State on it that it is an invoice for statutory late payment charges relating to invoice number xxx

Be prepared for your client to refuse to pay, but in our experience issuing the invoice is often all that is needed to make future payments timely ;)