{"id":301,"date":"2019-08-05T09:53:09","date_gmt":"2019-08-05T08:53:09","guid":{"rendered":"http:\/\/churchillrecoverysolutions.co.uk\/blog\/?p=301"},"modified":"2019-08-12T10:05:59","modified_gmt":"2019-08-12T09:05:59","slug":"how-to-charge-interest-on-late-payments","status":"publish","type":"post","link":"http:\/\/churchillrecoverysolutions.co.uk\/blog\/how-to-charge-interest-on-late-payments\/","title":{"rendered":"How to charge interest on late payments"},"content":{"rendered":"

Charging interest on late payments is an effective way of protecting your business\u2019 cashflow.<\/strong><\/p>\n

UK businesses of all shapes and sizes are suffering due to the country\u2019s late payment culture.<\/p>\n

80% of small businesses are paid late, and on average, SMEs are owed \u00a36,142<\/a>in late payments at any one time.<\/p>\n

Being paid late can have serious consequences for businesses. Being left out of pocket can cause cash flow issues, put businesses in debt with their own creditors, and cause them to miss out on business opportunities.<\/p>\n

Why charge interest on late payments?<\/strong><\/p>\n

Charging interest on late payments is a good way to reduce the risk of late payments.<\/p>\n

The threat of being charged interest can be a good deterrent, encouraging customers to pay on time.<\/p>\n

Every business has the statutory right to charge interest on sales to business and public sector customers, it\u2019s up to you if you decide to do so.<\/p>\n

How to charge interest<\/strong><\/p>\n

When you begin working with a new client, it\u2019s important to agree clear payment terms on paper from the word go, to ensure that there is no doubt as to when payment is due.<\/p>\n

The standard timeframe for making a payment is 30 days.<\/p>\n

Interest begins accruing on a payment from the end of the agreed credit period.<\/p>\n

According to the law, you have the right to charge interest at the Bank of England base rate, plus 8%.<\/p>\n

Other charges<\/strong><\/p>\n

Late payment fee<\/strong>– Businesses are also eligible to claim an additional fixed late payment fee.<\/p>\n

The value of this fee depends on the size of the debt. (\u00a340 for debts of less than \u00a31,000, \u00a370 for debts between \u00a31,000 and \u00a310,000 and \u00a3100 for debts of \u00a310,000 or more.)<\/p>\n

\u201cReasonable\u201d recovery costs<\/strong>\u2013 This fee can be used to claim back the cost of using a debt collection service to recover the debt.<\/p>\n

 <\/p>\n

Always consider whether your relationship with a customer is worth a few pounds in interest. Charging interest and other late payment fees may ruin your relationship with a customer, so proceed with caution if you wish to do business with a customer again.<\/p>\n

For more advice and help with debt collection, give our team of experts here at Churchill Recovery Solutions a call on 0333 320 0748.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Charging interest on late payments is an effective way of protecting your business\u2019 cashflow. UK businesses of all shapes and sizes are suffering due to the country\u2019s late payment culture. 80% of small businesses are paid late, and on average, SMEs are owed \u00a36,142in late payments at any one time. Being paid late can have […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[55,3,76,121,22,155,47,132],"tags":[75,156,68,8,86,93,9,10,87,71,157],"class_list":["post-301","post","type-post","status-publish","format-standard","hentry","category-chasing-payments","category-churchill-recovery","category-debt-collection","category-debts","category-insolvency","category-interest","category-recover-your-debts","category-recovering-debt","tag-business-debt","tag-charge-interest","tag-churchill-recovery","tag-debt-collection","tag-debt-collection-agencies","tag-debt-collection-company","tag-debt-collection-procedures","tag-debt-collection-tips","tag-debt-recovery","tag-insolvency","tag-interest"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t