Question 1

What counts as a late payment?

Accepted Answer

A payment is late when it has not been received by the due date stated on your invoice or agreed in your contract. If no payment terms were agreed, payment is typically due within 30 days of the invoice date or delivery of goods/services.

Question 2

How long should I wait before chasing a late payment?

Accepted Answer

You can start chasing payment as soon as it becomes overdue. Garfield can send friendly reminders immediately after the due date, then escalate to formal demand letters if the debtor does not respond.

Question 3

Can I charge interest on late payments?

Accepted Answer

Yes. Under the Late Payment of Commercial Debts (Interest) Act 1998, you can charge interest on late B2B payments at 8% above the Bank of England base rate, plus a fixed compensation amount. Garfield calculates this automatically.

Question 4

What is the compensation I can claim for late payment?

Accepted Answer

For business-to-business debts, you can claim fixed compensation: £40 for debts under £1,000, £70 for debts between £1,000 and £9,999, and £100 for debts of £10,000 or more. This is in addition to interest.

Question 5

Should I chase late payments from good customers?

Accepted Answer

Yes. Most late payments are due to oversight or cash flow issues, not bad intent. A professional, automated reminder often prompts quick payment without damaging the relationship.

Question 6

What if my customer is experiencing financial difficulty?

Accepted Answer

Garfield can help you negotiate payment plans or settlements with debtors who cannot pay in full immediately. Recovering something is often better than getting nothing from an insolvent debtor.

Question 7

Can I recover multiple late payments at once?

Accepted Answer

Yes. Garfield can process your entire accounts receivable backlog, chasing multiple debtors simultaneously. Each case is handled individually with appropriate correspondence.

Question 8

How does Garfield integrate with my accounting software?

Accepted Answer

Garfield connects with popular accounting platforms like Xero and QuickBooks. Once connected, it can automatically identify overdue invoices and start the recovery process without manual data entry.

Question 9

What if the debtor says they never received the invoice?

Accepted Answer

Garfield maintains records of all correspondence. If a debtor claims they did not receive an invoice, Garfield can resend it along with a demand letter, resetting the payment deadline.

Question 10

At what point should I consider court action?

Accepted Answer

If a debtor has not paid or responded to a formal Letter Before Action within 30 days, you can consider issuing court proceedings. Garfield can escalate your case automatically if the debtor remains unresponsive.

Question 11

Can I use Garfield for consumer debts?

Accepted Answer

Garfield is designed for business-to-business debt recovery. If you are owed money by a consumer, different rules apply and you should seek specific advice about consumer credit regulations.

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Late Payment Recovery FAQs