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Jennifer James

Jenny James Training

Training Consultant

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Late payment of invoices


Hi All

I have a client whose payment terms state 45 days.  They never meet this.  The excuse this time for paying at 51 days is that "due to holidays and generally the director not being here every day it is not possible to pay every invoice on exactly 45 days.  We make, as most companies do, one payment run per week".

I am really rather fed up that, yet again, the small business person is expected to wait.  Surely if they only make one payment run per week they need to include in that run all invoices that will be up to 45 days before the next run is made!! It ain't rocket science is it?

How have other freelancers handled this? I am considering ditching them as they were the organisation who provided poor materials for a course recently and refused to pay my additional development time (see Contract Question in Any Answers from 27 May).  All views gratefully received.

Hope you are all enjoying some sunshine.


3 Responses

  1. Deposit?

    Hi Jenny,

    This is always a tricky subject, since you usually want to maintain a good relationship with your client to secure future work. 

    One of the things that I have done previously is to ask for a percentage upfront as a deposit, though this will depend on how far in advance the work is planned. This is easily justified as you will be scheduling time to work on the contract in advance. 

    If the contract has a reasonably long duration, it may be worth setting payment milestones on a monthly or weekly basis to ensure you get paid sooner rather than later.

    Sadly both of these techniques add to your admin workload, but they do help with cashflow.

    Good luck!



  2. Late Payment Fees?

    First of all, why is it their payment terms? As the supplier it should really be you setting the payments terms and your customer agreeing. Ok in real-life it is often the other way round, but it sounds like you are already on the back foot.

    So anyway, let's assume you have already agreed 45 days – that's fine. If they are paying you on 50 days then that invoice is still late – they must be able to see that. Tell them you will add compensation and interest under the Late Payment Regulations – you can see a guide on the calculation here

    If you're considering ditching them anyway, then you could go back through all your old invoices with them and claim the compensation for every time they paid you late. Combining the Late Payment Regulations with the Satute of Limitations Act the late fees can really add up – I know one guy that did that and claimed back £100k

  3. how important are they to you?

    Hi Jenny

    Steven and Adam's points are valid so i'm focusing on your comments about ditching them. 

    The key questions is how important are they to you?   This can be measured in financial terms such as what % of income do they make up,  but also non financial terms, such as, do they act as a reference for you?  do you enjoy the work you do for them?  Is every piece of work hassle or admin heavy? 

    Another key question, what would happen if you didn't work for them?  Could you easily replace them?  What would you do with the time not spent doing that work,  not spent on admin etc?

    Its never an easy decision to ditch a paying client and its a decision to not take lightly however sometimes losing a client which is more hassle than its worth will free up more time. 

    Good luck. 


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Jennifer James

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