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I'm wondering if anyone has an overdue invoice policy that they would be willing to share. We have an outstanding invoice from December for a considerable amount for a service provided to another organisation. We currently have a set time limit by which time the invoice should be paid, but nothing for when this date is reached apart from to send reminders and keep chasing for payment. I'm wondering if having a policy stating a late payment fee or interest will be charged after a certain point but looking for guidance on best practise for this.

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Natasha Popovich Staff PANEL

Finance Officer at Jobadder Limited 1 year ago

Hi Caroline,

Chasing unpaid invoices can be stressful and time consuming, and late payments could, especially for small charities, mean the difference between keeping the lights on or pause delivering your services.

Personally I am always in favour of polite and friendly reminders (phone calls and emails), rather than threatening with late fees and interest. In my experience, most of late payers are not avoiding their obligation purposefully and are simply unorganised or understaffed – things easily slip through the cracks and people forget (or leave and don’t pass the info on).

It is crucial that you find the right person to speak to, and reach out to them directly. Always keep records of your correspondence (who you talked to and/or emailed, the date and the time), as this might prove invaluable if you need to escalate things further.

Unfortunately, there are times when you will be left with no choice but to escalate things, and referral to a reputable debt collection agency can do the trick – many will do this for a small initial fee. And while legal action is sometimes needed, it’s unlikely you’ll ever need to go down this route.

Regarding the overdue invoice policy, I’m sure you can find many examples and templates online, and then tailor them to suit your needs.

Good luck with payments chasing, I feel for you ❤️

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Shai Patel Staff PANEL

Secretary Treasurer at Jackfield Village Hall (also Director at ICON Business Growth Professionals) 1 year ago

Natasha Popovich Hello Natasha and Caroline,

Firstly, I share Natasha's sentiments, Caroline, and feel for your predicament. Secondly, Natasha is also correct in following up with the debtor politely and maintaining correspondence records.

As a step prior to debt collection via a debt collection agency, reputable credit control services organisations may be able to help in a manner that is still formal, less adversarial and, more importantly, retains your client relationship with the debtor.

Should that fail, then yes, consider a reputable debt collection agency.

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Arman Alan Ali Staff PANEL

Freelance Public Relations Consultant at Various 1 year ago

Shai Patel This link may help, even if it doesn't directly apply to your situation it will give you an idea of the sort of policy should have in these situations: https://www.gov.uk/late-commercial-payments-interest-debt-recovery/charging-interest-commercial-debt

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Fredrick Wineglass Staff PANEL

Trustee at Receipent of the poisioned chalice 1 year ago

I of course assume that you've written once or twice and tried ringing the relevant people and had no joy. You should write a formal letter saying that you have tried to arrange payment without any joy and will be asking XYZ to get in touch to deal with it on your behalf if the invoice is still outstanding in two weeks' time.

I also suspect that before going to a recognised debt collector you could ask another organisation that you are friends with and ask them to submit a letter for you; one that you wrote for them to send. If the chasing-up letter came from someone else on different letterhead stationary plus came with a statement/invoice from yourselves then I'm sure it will be taken more seriously. Using another arms-length body does say to the debtor that this isn't going to go away. Your letter can say that this step is the prior to commencing more formal steps.

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Hirsch Sharma Staff PANEL

CEO at Boardroom Consultants 1 year ago

Hirsch Sharma's badges

Hi Caroline

One can only give so many polite reminder. One must not give the impression of being weak otherwise the debt will never be paid.

I use a Legal insurance policy: this company then use solicitors to collect any debt.

Another way is to use a good debt collector who will charge a commission normally about 20% after debt is collected.

Do not employ any debt collector who wants money upfront because they will take your money and do nothing.

If all fails fill in the online form for court action. It is easy to do these days.

It is important to have in the terms and conditions and on the invoice that late payment, admin fees and interest will be charged at 8%.

I hope all this is helpful

Warm regards

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