Home – New Forums Money matters overdue interest penalties

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  • #987192
    TehCamel
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    I’m planning on tightening up my receivables.

    I’ve been reviewing this article:
    http://dsdbi.vic.gov.au/corporate-governance/legislation-and-regulations/contracts-for-fair-payments

    my contracts all have overdue statements pretty much as outlined above – that we may reclaim costs based on the itnerest rate etc.

    so,
    Given an invoicedate of ID and a due date of DD and DueReminder of DR, an invoice value of $500 inclusive of GST

    would i be correct in:

    ID 30 March
    DD 14 April
    DR 17 April (Issue a reminder to the customer)
    DR+1 18 April (Make a phone call to customer)
    Generosity date of 21st April.

    Technically, because it was due on the 14th, the invoice becomes overdue on the 15th of April, and interest could start applying then, is that correct ?
    If it’s not paid on the 21st of April, I could apply the calculation:

    $500 * 0.115 * (7/365) to get $0.191 in interest for 7 days.

    or do I have to wait till it’s 30 days overdue (I cant’ quite tell from the link above0

    #1161530
    Greg_M
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    I only read it fairly quickly, but my take was the debt had to be in excess of 30 days.

    Normally (in my experience) a typical 30 day payment cycle would be …

    Stuff done in April, is invoiced out at the end of the month, and would be due anytime until the end of March, after that it’s overdue.

    Regardless of the payment cycle/terms it would be nice to collect interest off late payers. I could probably go on a nice holiday with the proceeds :)

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