Late payments questions / calculating interest on partially paid invoices

Hello,

I'm very glad I came across this website. Found a lot of support and hope in the stories I read on the forum.

I was contracting for a company for about 3 years. Payments on invoices were delayed perpetually from the very beginning. I didn't have major issues with this since I eventually got paid. It was common the payments were delayed few months.

Major problems started when I decided to move on and have been left with several invoices unpaid and difficulties contacting the company. I know for a fact the company is financially healthy and this makes it even more frustrating.

As a next step I want to issue LPC charges hoping this will make them to re-establish contact and speed up the process.

Below are couple of questions I would like to ask here before taking the step.


1. Invoice was paid in few installments. Is interest calculated from the total until the invoice is cleared or perhaps is re-calculated based on the amount paid against the invoice?

2. Services were provided on a monthly basis, but invoices and time-sheets issued few months after. The company was aware of the charges after the end of each month, but not of the exact amount. In this case, is interest calculated from the time invoice was overdue or 30 days after the work was done?

3. Having evidence of the late payments and knowing the company is able to pay. Is it enough to re-issue invoices with addition of calculated interest and compensation charge and hope they will pay it or is it a case I should take directly to the court?

Many thanks for help!

Hi :)

Welcome to the site the agency in question sound fairly typical for the contracting world unfortunately.

We will do our best to answer your questions below:

Przemek wrote:

1. Invoice was paid in few instalments. Is interest calculated from the total until the invoice is cleared or perhaps is re-calculated based on the amount paid against the invoice?

The legislation states that interest runs on the whole amount until paid in full. So for the purposes of the calculation use the date the final instalment payment was received as the payment date.

Przemek wrote:

2. Services were provided on a monthly basis, but invoices and time-sheets issued few months after. The company was aware of the charges after the end of each month, but not of the exact amount. In this case, is interest calculated from the time invoice was overdue or 30 days after the work was done?

You have to invoice a company before the clock starts running on payment terms. So in this instance you would take the day the invoice became overdue. So say you invoice on the 1st, it becomes overdue 30 days later and this is the date you use as the overdue date.

Przemek wrote:

3. Having evidence of the late payments and knowing the company is able to pay. Is it enough to re-issue invoices with addition of calculated interest and compensation charge and hope they will pay it or is it a case I should take directly to the court?

You should pursue the balance as you would any overdue invoice, this site has some good advice on how to pursue reluctant clients. Give the agency a definite cut off date for payment by email and don't be afraid to pick up the phone and enquire as to why you remain unpaid. If necessary go straight to the top and try and make contact with the FD or even MD.

If that doesn't work, you can either try a reputable debt collection company (one that doesn't want money up front!), issue proceedings yourself, or engage a solicitor to do it for you. Each has its own advantages and disadvantages and costs.

Przemek wrote:

Many thanks for help!

Our pleasure, good luck!