Charging interest on overdue payment
Thread poster: Carole Hognestad
Carole Hognestad
Local time: 16:55
Norwegian to English
Apr 17, 2008

I am based in Norway and have one client that consistently pays 2-3 months late. I have given them a chance but to no avail, so have now decided to start charging interest. Can anyone tell me how to calculate the interest, e.g. do I charge on a daily/weekly/monthly basis, and what rate do I use?

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smiles  Identity Verified
Vietnam
Local time: 21:55
English to Vietnamese
+ ...
Same problem Apr 21, 2008

I really wonder if someone have successfully charged a client this kind of interest? I want to know the rate that they used.

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Carolin Haase  Identity Verified
Germany
Local time: 16:55
Member (2006)
English to German
+ ...
Collection agency? Apr 21, 2008

I have never heard that charging interest works, so why don't you hire a collection agency to get the money?

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xxxPerereinger
Local time: 16:55
EU directive on late payments Apr 21, 2008

Carole Hognestad wrote: do I charge on a daily/weekly/monthly basis, and what rate do I use?


There is an EU directive on late payments ec.europa.eu/enterprise/regulation/late_payments/index.htm

in the uk see
www.smebusinessnews.co.uk/

or google "EU Late Payment directive"


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Ralf Lemster  Identity Verified
Germany
Local time: 16:55
English to German
+ ...
Charging interest *can* work Apr 21, 2008

Hi all,
Earlier this year, I charged interest to a French client who attempted to unilaterally impose 60 days, despite their explicit agreement with our terms (payment upon receipt of invoice).

I charged interest in line with sections 286 and 288 of the German Civil Code (which were enacted within the scope of implementing Directive 2000/35/EC into German law).

Mind you, they paid by cheque, which meant that the bank charges ate up most of the interest, but the point was clearly made.

Best regards,
Ralf

[Edited at 2008-04-21 14:38]


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Carole Hognestad
Local time: 16:55
Norwegian to English
TOPIC STARTER
Thank you Apr 22, 2008

Thank you for all your comments.

I do not want to use a collection agency for this client as they're monthly invoices only amount to around NOK 1-2,000 at the most (approx. £100-200). I guess a collection agency in Norway would be too expensive. It's not that the client doesn't pay it's just that they pay late EVERY time.

I'll check out the link for the EU directive and hopefully this will do the trick. They may eventually get sick of paying interest and actually start paying on time.


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Steffen Walter  Identity Verified
Germany
Local time: 16:55
Member (2002)
English to German
+ ...
Drop the client Apr 23, 2008

Carole Hognestad wrote:
I do not want to use a collection agency for this client as they're monthly invoices only amount to around NOK 1-2,000 at the most (approx. £100-200). I guess a collection agency in Norway would be too expensive. It's not that the client doesn't pay it's just that they pay late EVERY time.


Hi Carole,

On a related note, it seems it is high time to drop this client (if you can afford to do so), especially when comparing the constant payment hassle to the low-volume jobs they offer.

Steffen


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