Very quick update

Quick update on my last post - payment will arrive in my bank account tonight (3 weeks late) which will include the interest but not the compensation fee. (I've amended my invoices to actually state an amount in the text I put at the bottom - for an invoice of under £1,000 this will be £40, more for over £1,000.)

I haven't lost business as a result as they've been in touch twice this week about upcoming projects - one I can't do as I'm too busy to even blog at the moment.

Right, back to the grindstone (laptop) ...

Late Payment Charges

(Image from freeimages.co.uk)

The time has come to get serious with one of my clients. For the second week running I've received an email asking me to be understanding as they can't pay my invoice due to 'insufficient funds' (a phrase I'm about to hear from my bank).

The invoice isn't for a great deal but 6 weeks ago when I completed the job and raised the invoice I'd been working long hours to get the project finished within a tight time frame (I had to turn it around in 5 days).

At a colleague's advice I added the following to the bottom of my invoices about 18 months ago:

Payment within 30 days please.
I reserve the right to claim statutory interest at 8% above the Bank of England Base Rate from the date the debt becomes overdue in accordance with the Late Payment of Commercial Debts (Interest) Act 1998 and to claim an additional sum for pursuing the debt as provided for by the Late Payment of Commercial Debts Regulations 2002.

Usually referring to this is enough to ensure that timely payment is made but not in this case so I'm having to follow through for the first time.

There are detailed instructions on how to calculate the interest bit here. At the moment it is 13% of the amount owed, divided by 365 days, multiplied by the number of days overdue - which doesn't look like much really.

But I can also claim compensation arising out of late payment £40 (more is due if the original invoice is over £1000). Which should just about cover any charges by my bank due to insufficient funds.

I will let you know how I get on with this client - they are usually quite good and at least they have let me know the situation rather than hoping I don't notice.



I'm assuming there is similar legislation in other parts of the world - do you find that small businesses or sole proprietors tend to be taken advantage of by larger companies in this way?