Interest charges.

[Sparks]

I delivered a service 6months ago.
My last invoice included interest at 2% per month.
My quote did not indicate that interest would be charged if not paid within a certain period of the original invoice.

Payment of the interest was refused because it was not indicated on the quote.
Am I legally entitled to the interest charges?

In order to avoid repetition I intend including a clause to my quotes stating that interest charges will be applicable if not settled within 14days of service or invoice(still to decide). What is the maximum % I can ask? My goal is to deter late/non payment.

Thank you
Sparks

[Justloadit]

Did they at least pay you the original amount?
If so, feel happy you got your money, and find another method to ensure this does not happen again. Charging interest is not the solution, getting paid is.
If they questioning the interest, and still not paid you, then use this conversation to get your money. Please pay me now, and I will waiver the interest.

[Sparks]

I don't care about the interest, unless, as in this case they do not deserve to get off lightly. I was hounded to do the work with promise of immediate payment. I want to now add a clause to my quotes stating the maximum interest % allowed as a deterrent to having the same thing happen.

[Justloadit]

Sparks, I think what you really require is another way of ensuring you get your money on completion of the job. Issuing an invoice and hoping the customer will pay, opens the door to abuse, as you are currently experiencing.

You have to insist upon arrival on site, how you are going to be paid. If cash, no problem, then continue. If an EFT, you need to find out if the person you are talking to has the authority to make the EFT, if not, then how are you going to ensure you are going to get paid.

If any doubt, then leave and go onto the next job. If the person requiring the services is planning on paying you, then they pass the test immediately, if not then you know what is going to happen, and request prepayment of 80% deposit, and final payment when the job is complete. Make sure you have a manner in disabling what you have done, with out breaking the law in the case payment is not made after completion of job. EG remove circuit breaker, but install a faulty one in its place. Correction is done upon receipt of the cash. I know sometimes it's not worth the return trip, but then prepayment should have been the preferred method of payment if this was going to be the case.

Gone are the days that promises were kept.

[Andromeda]

In order to avoid repetition I intend including a clause to my quotes stating that interest charges will be applicable if not settled within 14days of service or invoice(still to decide). What is the maximum % I can ask? My goal is to deter late/non payment.

Hi Sparks, it is 24% per annum at present. Though I agree with Justloadit, including it on your quote as a condition of supply (the customer must of course countersign it) is still a good strategy because the day will come when you do sue for a substantial amount and unless you have that in place, the best the court will award you is tempore morae interest and that at the moment is 10.25% and is not compounded. By including it in the quote in the correct manner, the accumulated interest forms part of the claimed amount, if you follow what I mean.

[Sparks]

Thank you for your response. My setup is fine for a bigger concern but I need to keep an eye out for big accounts which are only occasionally a problem. I issue a COC for properties to the transferring attorneys. I am prepared to wait a month for payment as municipal statements and bond registration also take time. When an invoice is 10 or even 20K and I must wait 6 months for payment it is not good for me. I have already invested a huge sum and need to keep up my cash flow.

Would it be acceptable if I were to waiver interest charges in lieu of a clause stating that accounts not paid within 30 days of date of COC will be subject to say R300 p/m administration fees?

This clause would of course only appear on quotes larger than 10K

[Andromeda]

You and a customer can agree to anything that is lawful, and I don't see anything in your suggestion that is. The concern I would have is that such a fee should incur VAT (I think) and you will be funding the VAT until, and if, it is paid. If you can endure the insult added to injury, then fine.