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What is reasonable?

3 years 3 months ago - 3 years 2 months ago #3049 by FRP
What is reasonable? was created by FRP
What is reasonable?
Almost 3 years ago I paid a supplier invoice very slightly late.
When I paid the invoice in full I had an amicable relationship with the supplier, and they sympathised with the reason for the very slightly late payment.
Now a recovery agency is chasing me for payment of interest of just over £1 and a fee of £40.
I would not do this to my customers - I consider this to be way over the top and unreasonable.
What do others think about this?

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3 years 2 months ago - 3 years 2 months ago #3053 by j.salmon@cpa.co.uk

When you failed to pay your supplier on time, this no doubt caused them additional work and affected their own cash flow.

As you paid late, then they are entitled to the compensation made available by the legislation.

The legislation is there to break the culture of late payment that is invasive in business culture.

Your supplier is entitled to claim this compensation up to six years after the late payment occurred.

It is only by applying the legislation that the culture can be changed.

At the time a customer can use their promise of future business as a way to make suppliers accept late payment without asking for interest or compensation.

However the lesson is that once they stop being a customer, the supplier can go back up to six years and ask for the compensation on any late payments.

Therefore businesses should pay on time. If they don't they risk facing a potential claim later on.

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