Interest / late penalties on invoices

Macho Philipovich macho.p at riseup.net
Sat Aug 5 18:45:05 EDT 2017


Great, thanks! I'll have a look.

On Aug 5, 2017, 6:32 PM, at 6:32 PM, Derek Atkins <derek at ihtfp.com> wrote:
>Send them a Customer Report
>That's what it's for.
>
>-derek
>Sent using my mobile device. Please excuse any typos.
>
>
>
>On August 5, 2017 6:03:53 PM Macho Philipovich <macho.p at riseup.net>
>wrote:
>
>> Thanks David.
>>
>> Since the goal is to make it as convenient as possible for clients to
>> pay, I'd really like to present them with a simple document that
>clearly
>> indicates the total outstanding amount owing, rather than a series of
>> invoices they have to try to sum up.
>>
>> Perhaps the solution is to send all the invoices with a cover sheet
>> listing the total, but that also seems unnecessarily complicated.
>>
>> If anyone has any further thoughts I'd be happy to hear them.
>>
>> Thanks,
>>
>> Macho
>>
>>
>> On 2017-08-04 09:56 PM, DaveC49 wrote:
>>> Macho,
>>>
>>> From an accounting perspective, the interest charge is not incurred
>until
>>> the original invoice is overdue past the agreed date and should be
>recorded
>>> as such at that time, while the original sale is recorded at the
>date at
>>> which it occurred.
>>>
>>> On this basis, I think it would be most appropriate to issue an
>additional
>>> invoice for the interest charges referencing the original invoice at
>the
>>> date those charges become applicable and then forward a copy of the
>original
>>> invoice along with the invoice for the interest charges to the
>customer. If
>>> the invoice remains outstanding, then you would have to periodically
>e.g
>>> monthly or quarterly send  new invoices for the accruing interest
>charges.
>>>
>>> In mananging this for low value sales, the additional cost of
>issuing and
>>> mailing the additional invoice may outweigh any additional gain from
>the
>>> interest charge, so it may be wise to have a threshold in the sale
>value,
>>> above which you change the terms of sale to include the interest
>charge for
>>> late payment, or more simply, not pursue the interest charges for
>sales
>>> below an appropriate threshold while keeping the provision in the
>terms of
>>> sale.
>>>
>>> You may also need to consider any constraints on policy imposed by
>any
>>> consumer protection legislation which may apply.
>>>
>>> It would be interesting to compare the effectiveness of offering a
>discount
>>> for early payment with the imposition of an penalty interest  (or
>using
>>> both) in encouraging prompt payment of invoices. Carrot or stick cf
>carrrot
>>> then stick?
>>>
>>>
>>> David Cousens
>>>
>>>
>>>
>>> -----
>>> David Cousens
>>> --
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