Charging interest on late payment

Charging interest on late payment

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We are finding that clients are taking longer and longer to pay and some I feel are starting to use us as a credit facility!
We have always included on our invoices reference to the Late Payment legislation and now want to start charging interest where a client is taking an excessive time to pay.
Our idea is to charge at the end of each month according to the amount outstanding on the last day.
Seems straight-forward so far especially where there has been no movement on the account for the month but what is slowing me down is trying to work out the variance when a part payment has been received or where interest has been charged at the end of the previous month. I feel I can only charge interest on the principle not the addded interest.
Because I now have about 30 of these calculations to do, to save me trying to re-invent the wheel, has anybody already created a spreadsheet to run this calculation out? If so would you be prepared to share it with me?
Many thanks
Martin Curtis
martin curtis

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By AnonymousUser
05th Nov 2008 17:28

Thanks Michael .... but
Thanks Michael.

All the calculators I have found just do the straight-forward:
£principle x days /365 x rate

My problem is, for each months calculation, trying to build into that an adjustment for part payments, additional invoices added and interest charged the previous month which falls outside this months interest charge.

I guess I need tio create a table which takes the opening balance, adds in this months events and then does the maths

Just hoping someone might have already done the head scratching!

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By AnonymousUser
05th Nov 2008 17:18

Try this
If you google the 'late payment ' rules one of the sites gives a calculator

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