Send them a Customer Report
That's what it's for.
-derek
Sent using my mobile device. Please excuse any typos.
On August 5, 2017 6:03:53 PM Macho Philipovich <mach...@riseup.net> wrote:
Thanks David.
Since the goal is to make it as convenient as possible for clients to
pay, I'd really like to present them with a simple document that clearly
indicates the total outstanding amount owing, rather than a series of
invoices they have to try to sum up.
Perhaps the solution is to send all the invoices with a cover sheet
listing the total, but that also seems unnecessarily complicated.
If anyone has any further thoughts I'd be happy to hear them.
Thanks,
Macho
On 2017-08-04 09:56 PM, DaveC49 wrote:
Macho,
From an accounting perspective, the interest charge is not incurred until
the original invoice is overdue past the agreed date and should be recorded
as such at that time, while the original sale is recorded at the date at
which it occurred.
On this basis, I think it would be most appropriate to issue an additional
invoice for the interest charges referencing the original invoice at the
date those charges become applicable and then forward a copy of the original
invoice along with the invoice for the interest charges to the customer. If
the invoice remains outstanding, then you would have to periodically e.g
monthly or quarterly send new invoices for the accruing interest charges.
In mananging this for low value sales, the additional cost of issuing and
mailing the additional invoice may outweigh any additional gain from the
interest charge, so it may be wise to have a threshold in the sale value,
above which you change the terms of sale to include the interest charge for
late payment, or more simply, not pursue the interest charges for sales
below an appropriate threshold while keeping the provision in the terms of
sale.
You may also need to consider any constraints on policy imposed by any
consumer protection legislation which may apply.
It would be interesting to compare the effectiveness of offering a discount
for early payment with the imposition of an penalty interest (or using
both) in encouraging prompt payment of invoices. Carrot or stick cf carrrot
then stick?
David Cousens
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David Cousens
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