Idea suggested by Bob Geal 9 years ago
With the advent of late payment legislation it would be helpful to have the option to automatically generate a late payment invoice when payment terms are not met. This would show the admin charge (£40 for invoices below £1000, £70 for invoices from £1000 to £9999, and £100 for invoices from £10,000 up), and the interest charge ((base rate+8%)invoice amount (number of days overdue/365)).
I think this is a good idea, but for it to be implemented it would need someone fully conversant with the late payment legislation to set it up to make sure the functionality is correct. This will ensure that a late paying client can't further delay payments because of a technicality with the correspondence.
I'm led to understand that you don't actually "invoice" for the admin charge and interest. What you do send is a "Late Payment Demand" letter detailing how much is overdue, and the cost of the admin charge and interest. Therefore I would say that what is needed is a way to create such a letter in Clear Books that complies with the legislation.
Payontime.co.uk is a good source of information and advice on dealing with late payers.
Just to add to the above, if the debt is above £750.00 you can also consider using a statutory demand.
See https://www.gov.uk/statutory-demands/overview for more information.
Hi,
Thanks for bringing this up and pointing it out.
If this is something HMRC require then I am certain we will be implementing such a feature soon. Currently we only have a late payment reminder, not something where the amount is changed as a result of being overdue. This is an interesting idea and something we could look into.
Chris
I have invoiced two customers for late payment and the invoices have both been paid. The legislation is relatively simple with a set range of admin charges dependent on invoice value and an interest charge based on the outstanding amount, number of days overdue and the current base rate +8%. It is not a requirement of HMRC but it woukd be useful to have the ability to raise an invoice that is automatically calculated according to the outstanding overdue invoice value and the rules outlined above.
Thanks for going into more detail here, Bob. Currently the only way I can see something like this being done would be for you to enter an extra item on the invoice which is specifically the charge. An automatic calculation based on the date and a particular percentage would be great though.
Chris
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