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What if they wont pay?

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12 years 8 months ago #484 by logicool
Just a thought. If the customer settles the debt and there is late payment charges outstanding, what do we do if they simply wont pay these charges?

If it is for a very small sum is there any point pursuing this through the courts?

Pursuing through the courts is a costly and time consuming business.

Just so you are aware, we refer to the legislation on account opening letters, quotations, order confirmation, invoices, statements and credit letters.

We sell boxes, not services, so there are rarely any disputes.

Just looking for an honest POV and maybe someone who has been through the court process to reclaim the legislation amounts plus the costs and if this was successful or not.

Thanks

Karl

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12 years 8 months ago #485 by David J
Replied by David J on topic Re:What if they wont pay?
Hello Karl

If a customer pays the debt but ignores the compensation and interest then that payment is used to pay the compensation and any outstanding interest first. The remainder pays off the invoice.

Because part of the invoice is now effectively partially paid. Interest and compensation will continue to accrue at the daily rate of the full amount.


Total invoice = £2,800.00
Total days overdue: = 109 days
Interest rate used: = 8.5%
Daily interest rate: = £0.6521
Total Interest owed = £71.07
Compensation: = £70.00
Total owed to date: = £2,941.07

Taking the example above, if the debtor only paid the invoice total, the result would be this.

Total invoice = £141.07
Total days overdue: = 109 days
Interest rate used: = 8.5%
Daily interest rate: = £0.6521
Total Interest owed = £00.00
Compensation: = £00.00
Total owed to date: = £141.07


If the remainder of £141.07 remains unpaid, then interest will continue to accrue the next day at £0.6521p per day.

After 30 days, the amount owed would be: £160.63
After 6 months the amount owed would be: £258.45
After 1 year the amount owed would be: £384.83
And so on.

If the debtor has paid an invoice but not compensation and interest, then I cannot see what their argument would be if a creditor went to court to claim what they are entitled to.

As Karl says, if someone has been through this process then it would be nice to hear about it.

Regards

David

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12 years 7 months ago #500 by logicool
Replied by logicool on topic Re:What if they wont pay?
David

Thank you for your response. Very informative and something that is needed to help small progressive businesses in these difficult times.

Karl

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12 years 7 months ago #506 by cyberprog
Replied by cyberprog on topic Re:What if they wont pay?
David,

This may come as quite a shock to some companies, so I'd be interested to know what the exact rules are that allow this so I can utilise it with confidence.

I have one client who's always taken the proverbial with payment terms and dates, and as it looks like the relationship is spiralling down the plug hole, I'm tempted to run back 6 years and invoice them for every single overdue invoice with interest and charges and potentially sue them for this.

Cheers!
Alex.

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12 years 7 months ago #507 by logicool
Replied by logicool on topic Re:What if they wont pay?
Alex

We have done this with success in the past. It is surprising what results you get.
However, we do include the correct working on all our documentation starting from account application form anf terms and conditions, through to quotation footer, order confirmation footer, invoice, delivery note etc and reminder letters.

We have used it with very large companies who seem to have a policy of paying on their terms despite agreement to 30 days and also small contractors who seem to operate a "paid when paid" policy.

Surprisingly we have noticed that this does not always stop the business. It can earn respect, or, in the case of very large companies it just gets paid by administrators.

We still have a few older debtors and are planning to implements this, back dated a number of years to send a clear message that the relationship is over.

I hope that this helps you considering it is from a companies point of view.

Karl

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12 years 7 months ago #508 by David J
Replied by David J on topic Re:What if they wont pay?
Hello Alex

Best place to start is to read the users guide .

Here is a link to the legislation on the legislation.gov website .

As Karl has pointed out, it is very important to have all supporting evidence. Particularly if you are going to claim retrospectively.

Regards

David

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