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One off charge for late payment

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tina
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13 years 7 months ago #375 by tina

One off charge for late payment was created by tina

I am responsible for the credit control at head office for around 40 franchisees that buy stock from us to run their business. As with most companies we have to enforce strict payment terms in order to keep our creditors happy. Although all payments come in every month at least a third of our franchisees are consistently late paying by anything up to 2 weeks after the due date. After countless amounts of reminders I have implemented "late payment interest" but looking at the interest chargeable on a daily basis wouldn't really phase them at say 75p a day for 1 week. My question is - would it be reasonable to charge a one off payment of say £10 + interest on a daily basis?

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David J
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13 years 7 months ago #377 by David J

Replied by David J on topic Re:One off charge for late payment

Hello Tina

Thank you for your question.

You can certainly create your own contractual terms of trade but you would need to get all your franchisees to agree in writing to them.

Using the statutory late payment legislation may be the better way to go.

Although the daily interest may not be about to much (in the early days) don't forget that you can add a compensation fee to the claim.

Up to £999.99 = £40.00 compensation
£1000.00 to £9.999.99 = £70.00 compensation
£10,000.00 or more = £100.00 compensation

This is a lot more than your £10.00 suggestion.

If you use our quick calculator , it will work out the compensation and daily interest for you (you will need to login with your username and password to use the new calculator).

You can also claim 6 years retrospectively for late payment interest and compensation on invoices that have been paid, but were paid late.

I would recommend that you look through the users guide to get a better understanding of what you are entitled to claim under the legislation.

I hope this helps

Regards

David

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One off charge for late payment