interest

How to Charge Interest on Late Payments

How to Charge Interest on Late Payments

Late payments are something to be avoided – they can halt your cashflow and, ultimately, stymie your business practices. Charging interest on late payments can be a good way of counterbalancing any cashflow difficulties and persuading debtors to pay up. Your right to collect interest on late payments is protected by law, and customers who refuse to pay interest can face legal action – though legal recourse should always be a last resort. This guide will help you: Establish whether and when to charge interest. Calculate the amount of interest owed. Persuade customers to pay. Should I charge interest? Remember that the interest you collect may not be worth the drawbacks that doing so will incur, especially if the debt amounts to an insignificant sum. Ask yourself the following three question... »