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HI There. I am new to this site and want to thank everyone for their help in advance.
I have a problem with a client not paying me. I have worked for this client, on a type of permanent basis, from Nov 2011 to about April or May 2012. This is when the company let me, and other employees, go due to not being able to afford the salaries. At that point they still owed me 3 months salary. I have, since then, started a web development company. The company I was working for, then come back to use my services as part of my company, as they cannot find anyone else as good as me, with a promise of a weekly payment as they are still not able to pay me on a permanent basis. They have made small payments towards the salary they owe me, but are still R3000 overdue. They also now owe me payment for the work I have done through my company for them.
On my first weekly invoice to them, I stated that i was going to charge a 5% interest on all outstanding/overdue amounts commencing from my next invoice. With the next invoice I sent, I charged a 5% interest on the total overdue amount and they are now telling me that i am not allowed to do so in terms of the national credit act. As i do not know much about this type of thing, I wanted to know if I am allowed to charge interest. Will it be statutory interest or contractual interest. There is also no written contract, but a verbal agreement. The other thing is that my company is not registered as a business or for VAT as yet. Planning to do that soon. Can I charge interest on every weekly invoice or is interest charged monthly?
The other thing is that I own the rights to their domain names and websites as they are registered on my name. I was thinking of putting their sites offline till payments are received, but if I do this they will not get paid and will risk losing their business as it depends on the sites being online. That will then mean that i will not get any of my money out of them. What should I do?
Thanks in advance for your help!!!!!
Shaun Van der Poll
I have a problem with a client not paying me. I have worked for this client, on a type of permanent basis, from Nov 2011 to about April or May 2012. This is when the company let me, and other employees, go due to not being able to afford the salaries. At that point they still owed me 3 months salary. I have, since then, started a web development company. The company I was working for, then come back to use my services as part of my company, as they cannot find anyone else as good as me, with a promise of a weekly payment as they are still not able to pay me on a permanent basis. They have made small payments towards the salary they owe me, but are still R3000 overdue. They also now owe me payment for the work I have done through my company for them.
On my first weekly invoice to them, I stated that i was going to charge a 5% interest on all outstanding/overdue amounts commencing from my next invoice. With the next invoice I sent, I charged a 5% interest on the total overdue amount and they are now telling me that i am not allowed to do so in terms of the national credit act. As i do not know much about this type of thing, I wanted to know if I am allowed to charge interest. Will it be statutory interest or contractual interest. There is also no written contract, but a verbal agreement. The other thing is that my company is not registered as a business or for VAT as yet. Planning to do that soon. Can I charge interest on every weekly invoice or is interest charged monthly?
The other thing is that I own the rights to their domain names and websites as they are registered on my name. I was thinking of putting their sites offline till payments are received, but if I do this they will not get paid and will risk losing their business as it depends on the sites being online. That will then mean that i will not get any of my money out of them. What should I do?
Thanks in advance for your help!!!!!
Shaun Van der Poll
An important thing to get right from the beginning is to try and stop the "snowball effect", where someone owes you a small amount, and continues to use your services, and then owes you a bit more...and eventually the entire account is out of hand. This sounds like the road you are about to go down. They may only be able to pay you when their own business picks up a bit, and adding interest will sour the relationship. I expect you want to do work for them again down the line, so one option would be to send them a letter, stating exactly what they owe you, that you are honoured that they have chosen you as a service provider, but that you wont be able to do any further work for them until their current account is up to date. Holding their domain names to ransom is somewhat frowned upon generally, but if the hosting of those domain names is incurring any cost to you, then it's understandable to tell them their sites will go offline at some point if payment is not being made. If they are paying someone else for the domain hosting, perhaps consider adding web hosting to your own business portfolio, and get them to pay you for the hosting instead. 
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