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Receiving payment for invoices on or before the agreed payment date is important to any business and its cash flow. Equally as important is ensuring invoices are paid on time. However, in certain instances, invoices are paid late, sometimes repeatedly or as a matter of course, this is often due to cash flow issues or when the monthly payroll date falls. When invoices are paid after the agreed payment date, often businesses overlook this provided payment is not unreasonably delayed.

However, many are unaware that in some circumstances, paying invoices late can give rise to further liabilities or, if you are the party being paid, additional entitlements. These include compensation and interest for late payment. These rights arise even if payment is only one day or a few days late. If applicable, these liabilities arise as soon as payment becomes overdue. Paying the principal amount does not necessarily or always prevent parties from bringing further claims in this respect.

There are certain circumstances where, for instance, compensation and interest cannot be claimed, however this is very much dependant on the circumstances and requires careful consideration.

We have seen recent trends to suggest that businesses are no longer willing to let "by gones be by gones", moreover, opting to attempt to bring further claims arising out of late payment. Reactions vary from business to business but it remains apparent that businesses still require considered advice tailored to the specific circumstances of the claim in order to make a commercial and considered decision on dealing or making such claims.

For those seeking to claim compensation and interest arising out of late payment, further consideration of the conduct of the claim is required.

At Ramsdens, we regularly advise claimants and defendants on various aspects of debt collection matters. We also offer a fixed fee service for unpaid debt claims up to a value of £10,000. For more information on this service and further advice please contact a member of our specialist litigation team at or call 01484 821 500.