Our Credit Control Process
We will regularly communicate with anyone who has any outstanding invoices with your business to ensure they pay on time. We will notify you first if you wish.
For any further overdue invoices, we will let you know and explain the different options we can pursue to try and get your invoice paid as soon as possible.
We will then contact the client with regards the overdue invoice and implement your chosen option.
When they do pay their debt, then we will mark their invoice(s) as paid in Xero. Otherwise, if they don’t pay, then we can look to apply additional measures.
You can claim interest and debt recovery costs if another business is late paying for goods or a service.
You can agree a payment date. If you don’t have an agreement, the law says the payment is late after 30 days for public authorities and 60 days for business transactions after either:
- the customer gets the invoice
- you deliver the goods or provide the service (if this is later)
The interest you can charge if another business is late paying for goods or a service is ‘statutory interest’ – this is 8% plus the Bank of England base rate for business to business transactions. You can’t claim statutory interest if there’s a different rate of interest in a contract.
For example, if your business were owed £1,000 and the Bank of England base rate were 0.5%:
- the annual statutory interest on this would be £85 (1,000 x 0.085 = £85)
- divide £85 by 365 to get the daily interest: 23p a day (85 / 365 = 0.23)
- after 50 days this would be £11.50 (50 x 0.23 = 11.50)
You must send a new invoice if you decide to charge interest on a debt you are owed.
You can also charge a business a fixed sum for the cost of recovering a late commercial payment on top of claiming interest from it.
The amount you’re allowed to charge depends on the amount of debt.
- Up to £999.99 – £40
- £1,000 to £9,999.99 – £70
- £10,000 or more – £100
If you are a supplier, you can also claim for reasonable costs in recovering debt.