Rebecca Cave FCA CTA MBA BSc
What to do when customers pay late
Like childhood diseases the best way of dealing with late payments is prevention. Make sure you have a good relationship with your customers and undertake checks on new customers to ensure you are not taking on slow payers. Always make your payment terms very clear on the order confirmation and invoice.
Consider offering a discount for early settlement. Remember you can legally charge interest at 8% above the bank base rate on all invoices that are not met within your stated credit period, or within 30 days of delivery of the invoice if no credit terms are given.
Follow this five-point plan for chasing late payments:
If all else fails consider using a debt collection company. However this will probably mean the end of your relationship with that customer.
DTI booklet: Better Payment Practice - Your Guide to Paying and Being Paid on Time
Free guide to charging interest: ring 0870 150 2500.