Your Rights Under UK Law
If another business is late paying for goods or services, you can charge them:
- Statutory interest: Bank of England base rate + 8%
- Fixed debt recovery costs: £40, £70, or £100 depending on debt size
- Reasonable costs: Additional costs beyond the fixed sum if justified
Common Payment Terms Explained
- Due on Receipt: Payment expected immediately
- Net 30: Payment due 30 days from invoice date
- 2/10 Net 30: 2% discount if paid within 10 days, otherwise due in 30
- EOM: Payment due at end of month
- MFI: Month following invoice
Best Practices
- Clearly state payment terms on all invoices
- Send invoices promptly
- Follow up on overdue payments within a week
- Document all communication about payment
- Consider offering early payment discounts