Academic journal article Manager

An Interest-Ing Development

Academic journal article Manager

An Interest-Ing Development

Article excerpt

Many are aware that small businesses already have a statutory right to claim interest on late paid invoices from large companies or the public sector, but from i November 2000, the right has been extended to allow small businesses to claim interest from other small firms.

The Better Payment Practice Group has introduced a three-point plan to highlight how easy it is to exercise the right to claim interest.

1. Be aware of your right to interest

Obtain a copy of the User's Guide to the Late Payment of Commercial Debts (Interest) Act 1998 from DTI Publications by calling 0870 1502 500, or view the website www.dti.gov.uk/latepay. These easy to read guidance notes explain how the Act works and how easy it is to calculate the interest owed.

2. Use it as a deterrent

Inform the purchaser that you intend to exercise your right to claim interest on late paid invoices. State clearly on all written communications, credit application forms, order confirmations and invoices:

"We understand and will exercise our statutory right to interest ifwe are not paid according to agreed credit terms. …

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