Do you charge interest to your slow payers?
Where the right to charge interest to late paying customers is not stipulated as part of a commercial contract there is a statutory provision to charge interest to late payers.
Under The Late Payment of Commercial Debts (Interest) Act 1998, as amended and supplemented by the The Late Payment of Commercial Debt Regulations 2002 a creditor can charge their commercial debtor interest. Interest is charged at what is called the "reference rate" this rate alters depending upon the current bank rate, it is set twice a year and it is currently 8½%.
To calculate the interest due from your debtor use the following equation:
Invoice value X 8.5% (current reference rate) divided by 365 to obtain the daily rate per invoice.
Then multiply the number of days the invoice is overdue by with the daily rate to give you your total, your are entitled to charge interest up until the date the payment is made.
Under the same legislation, if you have to take the step of passing the debt out to a commercial debt recovery agency you are entitled to charge Statutory Compensation. Statutory Compensation is charged on a sliding scale depending upon the debt value:
Debts up to £999.99 - fee of £40.00 is chargeable
Debts of £1000.00 up to £9,999.99 a fee of £70.00 is chargeable and on debts over £10,000.00 a fee of £100.00 is chargeable.
Good commercial debt recovery or commercial collection agencies such as Creditserve Collections will automatically add these additional fees to your outstanding account and pursue them for payment as well as your overdue sales ledger balance.
For more information on commercial debt recovery, credit control procedures, collection of overdue accounts and credit management advice please go to our website at www.creditserve.co.uk or contact us on 01992 414222
Wednesday 9 January 2013
Sunday 6 January 2013
Credit Control Advice for 2013 which can help with commercial debt collection..
If you are looking for Credit Control Advice for 2013, we posted in
interesting Article on our Corporate website (in the blog section of our
media page) and also on our Corporate Blog.
The article gave tips on how to safely open up a new credit account and the process you should follow, which if followed will help you when it comes to commercial debt collection.
Should you want to read the full article please visit: http://www.creditserve.co.uk/Media-Centre/Blog/January-2013-1/Credit-Control-Tips-for-opening-a-new-Credit-or-Cu
Should you have any questions about the credit control article or you require more information on our outsourced credit control or commercial debt collection services please get in touch via our contact form on our website or 01992 414222.
The article gave tips on how to safely open up a new credit account and the process you should follow, which if followed will help you when it comes to commercial debt collection.
Should you want to read the full article please visit: http://www.creditserve.co.uk/Media-Centre/Blog/January-2013-1/Credit-Control-Tips-for-opening-a-new-Credit-or-Cu
Should you have any questions about the credit control article or you require more information on our outsourced credit control or commercial debt collection services please get in touch via our contact form on our website or 01992 414222.
Friday 4 January 2013
Commercial Debt Collection Advice for 2013
When considering what advice to give in recovering outstanding debts or debt collection generally it is wise to consider the old proverb, "prevention is better than cure" Trite but true.
Debt recovery, cash collection and aiding your cash flow are always going to be easier if you have established before you extend credit EXACTLY who you are dealing with and what they have in terms of asset.
When considering offering a credit account is is vital to know whether you are dealing with, for example, B Baggins & Co Limited (purely a management company with no assets whatsoever), Bilbo Baggins & Nephew Limited (a non-trading company) or B Baggins (The Shire) Limited that has very healthy accounts on file and included amongst it's large assets is one very shiny, (highly transportable and easily converted into cash by High Court Enforcement Officers) ring.
How do you know who you are dealing with? The answer is painfully obvious. Ask them.
Make sure that any new customer THOROUGHLY completes an application form. I see many perfectly good application forms that are only half-completed where a rep has been eager for the sale (but not necessarily for payment) and missed the opportunity to find out exactly who is being contracted with.
If you are dealing with a limited company, get their registration number. It is also useful to ask for headed paper that must display a company registration number. That way no matter how many times they may change their name you will know precisely who you will be dealing with. Once you have established who they are, take a look at their accounts filed at Companies House. Accounts are easily accessible via our online shop http://www.creditserve.co.uk/Online-Shop
If you are not happy with the accounts filed, don't be afraid to ask the directors questions about the company or their past businesses and experience or seek Personal Guarantees from them. If they are not happy to give them, ask yourself the question; if they are not prepared to take any risk on behalf of their company then why should I?
It is true that even companies with the best and most exhaustive credit checking and credit control procedures will incur bad debt from time to time but when planning your debt collection procedures the best place to start, as Julie Andrews would say, is at the very beginning.
Please come back and visit my blog for tips and advice on commercial debt recovery, insolvency and credit control.
Debt recovery, cash collection and aiding your cash flow are always going to be easier if you have established before you extend credit EXACTLY who you are dealing with and what they have in terms of asset.
When considering offering a credit account is is vital to know whether you are dealing with, for example, B Baggins & Co Limited (purely a management company with no assets whatsoever), Bilbo Baggins & Nephew Limited (a non-trading company) or B Baggins (The Shire) Limited that has very healthy accounts on file and included amongst it's large assets is one very shiny, (highly transportable and easily converted into cash by High Court Enforcement Officers) ring.
How do you know who you are dealing with? The answer is painfully obvious. Ask them.
Make sure that any new customer THOROUGHLY completes an application form. I see many perfectly good application forms that are only half-completed where a rep has been eager for the sale (but not necessarily for payment) and missed the opportunity to find out exactly who is being contracted with.
If you are dealing with a limited company, get their registration number. It is also useful to ask for headed paper that must display a company registration number. That way no matter how many times they may change their name you will know precisely who you will be dealing with. Once you have established who they are, take a look at their accounts filed at Companies House. Accounts are easily accessible via our online shop http://www.creditserve.co.uk/Online-Shop
If you are not happy with the accounts filed, don't be afraid to ask the directors questions about the company or their past businesses and experience or seek Personal Guarantees from them. If they are not happy to give them, ask yourself the question; if they are not prepared to take any risk on behalf of their company then why should I?
It is true that even companies with the best and most exhaustive credit checking and credit control procedures will incur bad debt from time to time but when planning your debt collection procedures the best place to start, as Julie Andrews would say, is at the very beginning.
Please come back and visit my blog for tips and advice on commercial debt recovery, insolvency and credit control.
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