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Tax Tip:
If the total amount of PAYE and NIC you pay to the Collector of Taxes each month is less than £1,500 you can ask to prepare quarterly instead of monthly PAYE returns. Just fill in form P31 and send it off to the Accounts Office with your next payment slip.
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Rebecca Cave FCA CTA MBA BSc

What to do when customers pay late

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:

  1. Ask why the payment is late. Is it one-off, or due to the customer’s systems?
  2. Get the name and direct line number for the person dealing with the invoice for follow up calls.
  3. If you are told a cheque is on its way ask exactly when the cheque will be written and when it will be posted.
  4. Send a statement of all outstanding invoices, and keep copies of all correspondence.
  5. Repeat the above and send letters to persistent non-payers by registered post.

 

If all else fails consider using a debt collection company. However this will probably mean the end of your relationship with that customer.

 

 

Website: http://www.payontime.co.uk/

 

DTI booklet: Better Payment Practice - Your Guide to Paying and Being Paid on Time

Free guide to charging interest: ring  0870 150 2500.

 

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