Confirmation of '30 days' rule please

A client has recently delayed payment on 3 invoices, despite polite reminders and promises on their part to pay by certain dates.

Prior to the commencement of any assignment, my client was made aware (and agreed to in email) of my strict 14 day invoicing payment period - no exceptions.

This is also clearly sated on my invoices, as is the fact late payments will be penalised with interest and compensation.

All information regarding late payments/compensatory charges has been taken from this website.

Its states under the When is a payment late? that;

Where there is an agreed credit period, and the supplier has agreed, either in writing or orally, a credit period with the purchaser, the payment is late if it is made after the last day of the credit period.

However, when I have used an interest calculator or another website (www.contractorcalculator.co.uk/MainTemplate.aspx?PageKey=late_payment_calculator) I get an error warning sating that 'The late payment of commerical debts legislation only applies to debts later than 30 days.'

Can someone please confirm that I am actually allowed to charge interest and gather compensation charges from the date any payment is overdue, so long as my credit terms have been agreed (in my case, payment agreed to be made within 14 calendar days).

Best,
N.Turner

Hello,

If you have agreed 14 day terms in writing with the client and these have been accepted then payment is overdue on day 15.

You can legitimately use the legislation at this point.

The late payment legislation allows for 30 days as the default payment period in cases where no terms have been agreed. This does not override any alternative payment terms agreed between the parties.

Thanks for the confirmation.

I'm not sure if this is covered on the website (apologies if explained in forum, I'm just replying quickly) but if I am to request payment of interest and compensation, what time frame am I legally entitled to state I'd like this paying by? i.e can I demand payment within 30 days?

Also, this gets complicated as interest will be accruing during the period after I demand payment for a certain sum? I'm technically going to lose the days in between asking for a calculated sum and receiving the paid sum....

Nathan wrote:

Thanks for the confirmation.

I'm not sure if this is covered on the website (apologies if explained in forum, I'm just replying quickly) but if I am to request payment of interest and compensation, what time frame am I legally entitled to state I'd like this paying by? i.e can I demand payment within 30 days?

As far as we are aware you can demand immediate payment as the original invoices are now overdue anyway.

Nathan wrote:

Also, this gets complicated as interest will be accruing during the period after I demand payment for a certain sum? I'm technically going to lose the days in between asking for a calculated sum and receiving the paid sum....

That is correct, if you demand payment with the addition of interest on Monday and the payment is received on Friday you will not have received the interest for the intervening days. However in most cases the amount is negligible and you would need to balance the reward versus the time involved in pursuing this amount.

The payment terms are a matter between supplier and customer. The 30 days only applies if you don't agree your terms; in effect 30 days is the default position.