A Late Payment Demand Letter is similar to a Letter Before Action (LBA) but also asserts your right to claim interest and compensation under the Late Payment of Commercial Debts (Interest) Act 1998, helping to apply additional pressure for prompt payment.
If your customers are paying their invoices late you may be entitled to claim compensation and interest for your outstanding invoices.
A Late Payment Demand Letter contains similar information to an LBA but states that you are entitled to claim Late Payment Interest and Compensation under the Late Payment of Commercial Debts (Interest) Act 1998.
When can you use a Late Payment Demand?
You can claim Late Payment Interest and Compensation if:
- You have supplied goods and services;
- The debtor bought your goods or services for business purposes;
- The contract is not a consumer credit agreement; and/or
- The contract does not already contain a provision for interest on overdue invoices (or other remedy for non payment of invoices).
If we are unable to recover your debt through an LBA or Late Payment Demand, where appropriate, we will recommend follow-up litigation action through our solicitors. We will never commence any legal proceedings without discussions with the client who will always be kept informed.
A powerful alternative to issuing a Claim is to start insolvency proceedings. You can only do this for debts of £750 or more. To examine the pros and cons of Claims or Insolvency click here.
A late payment is one of the most serious problems a company can face, it can seriously effect your business cashflow, especially if you are a to small business in this country, and it’s something that needs your attention.
If you allow your cash flow to get sluggish, your business could suffer when it should be growing and thriving.
Thankfully, there is a simple and straightforward way to wake up those people who owe you money, and get them to actually do something about paying you. Writing them a Letter Before Action (LBA) will get you paid almost 90% of the time. It’s a real wake up call to those serial late payers!
You’ll find that an official and formally legal notification of an impending lawsuit, is a clear and stand out away of saying ‘this is your last chance to pay.’ Most businesses want to avoid costly and time-consuming litigation. By sending an LBD, you show them that you mean business, most will often do whatever they can to avoid these extra hassles and lengthily court proceedings.
Let Taurus Collections help you to start the litigation process and hopefully avoid the need for lengthily court action altogether. We can walk you through every step of the late payment demand letter process and are committed to helping your business get back the money it’s owed.
Late payment of invoices
Late payment of invoices or overdue payments put unnecessary strain on your organisation’s finances. The struggle is even more apparent during periods of economic uncertainty like Brexit, the pandemic, or the cost of living crisis.
It’s understandable that businesses want to hang on to their cash reserves for as long as they can, which sometimes means you’ve got your work cut out for you if you want to collect!
The most common reasons stated for late payment of invoices include:
- Your client is waiting for payment from their own customers
- Cheque’s in the mail
- They’ve not received an invoice
- The usual accounts payable person/admin/office manger is not available
So, what can you do to avoid all those awkward, repeated conversations and actually get your clients to pay on time? You can use and rely on your debt collection agency. Taurus Collections are here to help you to take control of your finances.