Introduction
Cash flow problems, wasted time and resources…late payments can cause significant issues for businesses. Fortunately, the Late Payment of Commercial Debts (Interest) Act 1998 and the Public Contract Regulations 2015 provide a means of recourse. However, making a successful claim can sometimes be a daunting process. In this article, we will provide a step-by-step guide on how to maximise your chances of a successful late payment claim.
What is a Late Payment Claim?
A late payment claim is when a business seeks compensation from a public body or contracting authority for receiving late payment for goods or services provided. By law (more on that below), public sector organisations are obliged to pay undisputed invoices within a 30-day period. Failure to do so means the business that receives the late payment is entitled to claim compensation.
Boost Your Chances of a Successful Late Payment Claim
Claiming compensation for late payments from the public sector can be a daunting task, but there are some ways to improve your chances of success. Simply follow our step-by-step guidelines.
Step 1. Understand the legislation
The first step is to familiarise yourself with the legislation that governs late payments. The Late Payment of Commercial Debts (Interest) Act 1998 allows businesses to claim late payment interest and compensation. Meanwhile, the Public Contract Regulations 2015 stipulate a 30-day payment term for public sector contracts.
Visit our pages on the Late Payment of Commercial Debts (Interest) Act 1998 and the Public Contract Regulations 2015 for a detailed understanding of these pieces of legislation.
Step 2. Ensure your invoices are correct
One of the main reasons for delayed payments is incorrect or incomplete invoices. Therefore, make sure your invoices contain all the necessary details and adhere to the contractual requirements. An accurate invoice will decrease the chance of disputes and can expedite the payment process.
Step 3. Keep clear records
Maintain clear and accurate records of all your transactions. This includes contracts, purchase orders, delivery notes, invoices, and any correspondence related to the payment. These records will serve as crucial evidence if you need to make a late payment claim.
Step 4. Communicate effectively
Establish clear lines of communication with your clients. If a payment is late, reach out to them promptly before taking any further action. It could be an oversight or a simple administrative error that can be quickly resolved.
Step 5. Know when to make a claim
Understanding the right time to make a claim is crucial. A claim for late payment interest and compensation can be made as soon as a payment is late. However, it’s often worth discussing the issue with your client first, as this can sometimes lead to a quicker resolution.
Step 6. Get professional help
Navigating the process of making a late payment claim can be complicated and time-consuming. Fortunately, enlisting specialist services like latepaymentaction.com can help you make a successful claim. We provide a straightforward Claim Process and offer an Eligibility Checker to see if you can make a claim. The free Claim Calculator can help you estimate how much you could be entitled to.
Browse our FAQ page for more information on the process, or get in touch with our team of advisors.
Key Takeaways
Late payments can significantly impact businesses, but the right knowledge and approach can help you successfully recover what you’re rightfully owed. Understanding the legislation, maintaining clear records, communicating effectively, and getting professional help can maximise your chances of a successful late payment claim.
Visit our Insights page for more advice on dealing with late payments. And remember, you don’t have to face late payments alone. At Late Payment Action, we’re here to help you exercise your rights and get the compensation you deserve.
