Was the Invoice ever paid in full?

Hi all, hope you can help me out

I have had a recent epiphany about the way I run my business. For the last 4 years I have suffered considerably due to my customers treating me like a credit facility and have concluded that the only way for it to stop, for me, and for all the small businesses out there is to make a stand. So this morning I have started to audit my customers' accounts for the last 6 years.

After doing around about 50+ hrs of research into the late payment law, there seems to be one question that is goes constantly unanswered in my mind:

Did the original invoice that I sent to my customer ever get paid in full?

Now here is my two different lines of thought on the issue:

1. I have sent my customers multiple statements in the interim period (since they paid) showing that the account was up-to-date and therefore if I am to make a claim now it should only be interest for the period that the invoice was not paid, and compensation.

- or -

2. My customers should know the law. The law is the law and claiming ignorance is never a defence, the interest started running on the 'relevant day', they never paid in full. So now that I make my claim they should be charged interest on the full invoice amount for the period that the payment was late, intereest on the remaining principle from when they paid to the time that they provide the full and final settlement, and the compensation.

To exemplify this more I would like to show you the difference that I calculated today on one of my customers invoices:

Invoice £10,000.00, date 25/09/2006, terms 30 days net.
Payment £10,000.00, date 05/01/2007
Days overdue = 70
Rate 12.5%

For 1 the total would be:

((10000*.125)/365)*70 =£239.73 + 100 = TOTAL: £339.73

Whereas the calculation with 2. in mind would be:

as above, but from the 5/01/07 interest would have been accruing on the 'unpaid principle' and thus:

((339.73*.125)/365)*2075 = £241.42 = TOTAL: £581.15


What I would like to know is, which one do you agree with? and why, if possible

Many thanks

Dave.