Here are the podcast episode notes based on the provided audio file:

In this episode of Minimise Debt, Maximise Cash, host Emma Reilly (CEO of Top Service) introduces a discussion featuring Nicola Hannant from CEMEX and Paula Swain of Kearns Legal Services.

Moderated by Philip King (Non-Executive Director), the conversation addresses the real-world implications of charging statutory late payment interest. The panel explores how to retain clients after applying charges, whether late fees spark competitive customer loss, and how credit teams should handle complex scenarios like internal fraud discoveries or acceleration clauses in contract terms.

Key Takeaways & Discussion Highlights

• Retaining Customers After Applying Late Payment Interest:

  • Automatic Reviews: When an account is escalated to a "letter before action" stage, the account is placed on a pending status.

  • Selective Trading Periods: Even after a debt and its statutory compensation are settled, businesses may pause trading with that customer for 6 to 12 months to observe whether their payment behaviour stabilises externally (using platforms like Top Service).

  • Commercial Alignment: If a customer threatens to walk away over late payment fees, the credit team collaborates internally with the commercial/sales department to evaluate whether to negotiate the charges or hold firm based on the client's long-term value.

• Do Competitors Win Business by Not Charging Interest?

  • Zero Market Loss: Nicola notes that CEMEX does not see business loss to competitors simply because statutory charges are applied.

  • Red Flag Customers: Paula Swain points out that if a client's main concern is avoiding late payment charges, they may already be planning on paying late—making them a risky customer to hold onto anyway.

• Chasing Fraudulent Accounts Before Due Dates:

  • Statutory Interest Restrictions: If an account is identified internally as fraudulent and credit facilities are pulled before an invoice is officially due, creditors cannot charge statutory late payment interest or compensation at that stage, as the contractual due date has not yet passed.

  • Best Practice Action: Place the account on hold immediately. As soon as the original payment due date passes, escalate legal action as quickly as possible.

• Acceleration Clauses & Multiple Invoices:

  • Handling Acceleration Terms: If contract terms contain an acceleration clause (stating all future invoices become immediately due if one goes overdue), statutory late payment charges are generally only applied to the originally overdue invoices during initial collection efforts, rather than charging late interest across the accelerated future balance.

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Connect with Us

Have questions about credit management or enforcing statutory interest? Connect on LinkedIn:

• Emma Reilly: Search for Emma Reilly Top Service on LinkedIn.

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