law

[davidmarsden]

my friend works for himself as a builder and has declared himself a limited company. he is now facing long delays in receiving payments for work completed. how long is he legally obliged to wait before taking action and /or adding interest to the outstanding debt

[ummmm]

He should set out his terms on his invoice.

[buildersmate]

Welcome to the real world of doing business.
Just because an organisation has changed to a limited company doesn't automatically mean the terms of trade change such he is on 30 days payment of account (or some other figure - but 30 days is common) - it is up to him to decide what his standard terms of trade are and ensure that this is written into his contracts.

[Postdog]

"declared himself"?

It takes a bit more than that to be a limited company!

[ubasses]

Registering as a Limited Company should not make any difference. He must make clear his terms of payment on his invoices, ie. payment in 7/14/30 days, whichever is best for him. Probably best to give people an extra week, as they tend not to send cheques until the last day, then send out reminder.

[buildersmate]

No, Ummmm, not on the invoice - it is far too late then. It needs to be established as part of the quote for the job and the client's acceptance of that quote.

[ummmm]

I ran a car repair business. Our terms were on the invoice, but we had continuous work, not one offs. So, you're right.

[ummmm]

One off jobs were immediate payment.

[davidmarsden]

sorry-ishould have said he is now a bona fide limited company but thanks everyone for your help.i can see the answer appears to be in the wording of the quote/contract

[EvianBaby]

There's nothing stopping him sending some 'threatening' letters after a reasonable amount of time though.

We've had occasions where a 'letter before action' gets the money paid up.

[tonywiltshire]

As BM & ubasses sensibly say your business status makes no difference to how long you may wait for an invoice to be settled. Many companies have only one payment day per month and will deal with all approved invoices from the previous month on that day regardless of what terms the supplier has applied, if you wish to obtain further orders from the same source you will have to accept this, if you take legal action you can probably say you will never deal with that company or individual again, it may be unfair but it is true. The only way to be paid on time is to chase payment on a daily basis as soon as they become overdue and hope you do not irritate the supplier over much, if you require repeat business.