Invoice small print

[itinerant baker]

I'd be interested in what small print other freelancers use on their invoices. I've got an outstanding invoice from a client that I'm chasing at the moment, and whilst I've got some small print I'm starting to wonder how much use it'll actually be if the worst comes to the worst. Could perhaps do with some ideas to fine tune mine, eg stating the amount of interest I'd charge for overdue payment.

[paulears]

I suspect that many of us don't generally work this way. I just state my terms - which are 30 days. After that, if it is outstanding then I work two ways - if it is a regular client I wish to keep, I do statement after statement. If it's somebody I don't know then they get one reminder then straight into the small claims procedure. My own experience is that it doesn't matter what you put on the invoices if they are not going to pay - and all the blurb about late payments incurring x% just encourages some to not pay, assuming that you'll just add the late percentage and they can live with it. I like "Terms - Strictly 30 days" and that is that.

[p.k.roberts]

The 'Late Payment of Commercial Debts Act' gives a figure of 8% above base rate. Details at;

 

http://www.payontime.co.uk/legislation/legislation_main.html

 

of course, as Paul implies, you have to decide whether you ever want to work for them again :-)

[Kevin@Wicked]

Definately have a look at www.payontime.co.uk !!!

 

I have terms of 30days from invoice with the following information written below.

 

"We understand and will exercise our statutory right to interest and compensation for debt recovery costs under the Late Payment of Commercial Debts (Interest) Act 1998 (as amended in 2002) if we are not paid within the agreed payment terms."

 

You can then charge a one-off compensation charge (PER INVOICE) of £40 under £1000 or £70 over then (at present til June) 13.5% statutory interest!

 

from website

 

Example

If the base rate is 4% for the six-month period when the debt became late, then the statutory interest rate is 12% (4% base rate plus 8%)

Debt is £851.06 plus £148.94 VAT = total £1,000

If this debt is 30 days late, then the interest owed is:

£ 1,000 x 12% = £120 (the annual rate)

£ 120 ÷ 365 = 32.9p (the daily rate)

32.9 pence x 30 days = £9.86 (the interest owed to date)

[zonino]

one important thing is to make sure that you're adhering to their requirements, if they state that the need a PO to be stated on the invoice, and you aren't, then chances are you aren't going to get paid! This is particularly true of large companies

[Ike]

30 days always seems a bit generous to me especially with larger clients. My standard small print is "Terms: 15 days unless otherwise stated." and I have surprisingly few complaints. Of course I will extend these if I need to but I make a point crossing 15 days out and hand writing 30 or whatever so they know it's not my normal terms.

 

I'm also not really a huge fan of putting lots of information on invoices (bank details etc) as I know just how many 'go missing'. Mine contain my name, address, mobile number, invoice number and a brief description of the goods or services. I'll include any client references if I know them but if the client really needs to know anything else they can contact me.

[David Lee]

As with the others. Late payments of debt act make it more expensive for them to sit on your invoice. Always put your terms on the invoice plus whatever references/ details the client need to process the invoice. The 30 days is for the client to raise any queries etc. (though most seem to only look at it after 30 days).

 

I usually send a reminder after 30 days, phone call a week after that, then, if nothing appears to happen, everything is in writing just in case I need to go to small claims court.

 

Just had one recently where the conversation went like this:

 

Me: - Hello, do you realise that invoice x is overdue

Accounts : Oh, sorry, next cheque run is in two weeks

Me: Well, the invoice is already a week late

Accounts: I'm sorry, but there is nothing I can do

Me: I appreciate that, it's not a problem. I'll just send the letter through detailing the amount of compensation being charged, and the interest accruing daily.

Accounts: Really sorry, but there is nothing I can do.

Me: Sure, no problem, the letter will go in the post today.

 

About 3 minutes later, phone call from the accounts dept. saying that a cheque will be in the post today for the full amount if I don't charge the compensation and interest. And, yes, the cheque arrived the next day (and cleared) - and I still get work from the company ;). It probably helped that one invoice was for £15. Try explaining that you had to pay £40.00 extra (the interest on the capitol is negligible.

 

So, IMHO, you should

a) Get a Purchase order

b) Mention the Late Payment of Debt Act (I use the same Text as Kevin above)

c) Include all details for the accounts dept. to process the info.

d) Chase in writing as soon as it is overdue

e) A friendly phone call to the accounts dept. always help

f) If all else fails, keep everything in writing, note any phone calls - who you spoke to, and when.

g) Take them to the small claims court if they fail to pay - why would you want to work for a company that is not paying you?

h) If you are a union member (I.e BECTU) you can get them to assist. (Never tried it myself so it would be interesting to know what good they are).

 

Hope this helps a bit. It is vital to keep cash flow turning over for the Self employed or we can end up stuffed with bills to pay and only monies owed to our name.

[Ike]

The 30 days is for the client to raise any queries etc. (though most seem to only look at it after 30 days).

This is what really got me and is probably one of the major causes of my hatred of accountants (Blue Roomers excepted): If ever there was a query it was always on the thirtieth day. Thirty days means you pay within thirty day, if you're that incompetent you need to clarify every damn thing then do it in plenty of time.

 

h) If you are a union member (I.e BECTU) you can get them to assist. (Never tried it myself so it would be interesting to know what good they are).

They were a complete waste of space the time I used them. It was an issue with clear channel and after hours of talking to them (BECTU) on the phone they still did naff all to help. It was a couple of years ago mind.

[David Lee]

Glad I never had to go down the Bectu route then. I had a feeling that they wouldn't be much help.

[Guest lightnix]

The only thing I put (apart from my terms (30 days), accountants address, tax office address and UTR number) is a quick line, saying that any queries regarding the invoice must be raised within 14 days, after which point the invoice will be deemed as accepted.

[The Gaffa]

On mine, My Company Address, Invoice No., Date, Clients Address & Contact,

Details of services or supplies, Costs & Total ammount

 

Small Print includes Terms XX Days (XX Days depends on whom I'm working for) , A reference to Late Payment of Commercial Debts Regulations 2002, Payment method (Normally prefer a Cheque or if working for a large orginisation BACS details)

[lightsource]

Of course, you could always quote a client price X, then invoice them for price X plus 10%...........

 

Then offer them a 10% discount if they pay within 7 days......... Keeping you're side of the bargin.

 

If they don't, then the standard fees apply!

 

 

 

I appreciate that the OP's question was based in FREELANCE, but two things are really important.

 

1- Title of all goods remain with the seller until payment has been made in full.

 

2- E&OE which means Errors And Omissions Excepted.

 

Just incase you make a mistake on something, or transfer ownership of a product.

[zonino]

Of course, you could always quote a client price X, then invoice them for price X plus 10%...........

 

Then offer them a 10% discount if they pay within 7 days......... Keeping you're side of the bargin.

 

If they don't, then the standard fees apply!

 

you'd be better to state that when you were giving them the quote, I don't think what you've just described would stand up in court.

[David Buffham]

Shouldn't that be 9% discount? Anyway, to be honest I don't really see the point of invoicing 10% more than you quoted and only expecting to receive payment for 91% of the invoice total. Keeping the accounts straight would be a nightmare, as would handling of VAT. Plus you'd have the additional overhead of raising credit notes to cancel down the unpaid part of each invoice. I also think it would be counter-productive; certainly if you quoted us £1,000 and invoiced us for £1,100 then I wouldn't pay the invoice at all until you'd provided a credit note for the £100 overcharge. I don't see the need for complicating things: just invoice what you quoted and stipulate your payment terms; if those terms are breached then deal with it on a case-by-case basis in whatever way is appropriate.

 

I would also say that 7 day payment term is not all that reasonable for a number of reasons, and I've never received an invoice with those terms. Of course you can impose those terms if you wish, but I believe that the payment period has to be agreed between the supplier and the purchaser, otherwise it defaults to 30 days for the benefit of the late payment legislation. This agreement might be implied by the acceptance of a quote that specified the supplier's payment terms, but I don't think you can arbitarily specify a payment period on an invoice without having previously agreed it in a quote or contract.

[adamharman]

All I have is payment due within 14 days / 30 days depending on the customer.

 

Although it's sometimes tempting to add "knee caps will be broken on day 15"......