First Payment Reminder Letter (Including Commercial Debts Act Interest)
This First Payment Reminder Letter (Including Commercial Debts Act Interest) should be used where there is no contractual arrangement for payment of interest on monies due. This letter refers to the Late Payment of Commercial Debts (Interest) Act 1998 (CDA) and provides the basis for the calculation of that interest. Statutory interest is charged at 8% above the base rate set by the Bank of England. Please note that the CDA applies only where both the supplier and the customer are acting in the course of a business. It does not apply to "business to consumer" contracts.
This letter sets out to record the late payment, the amount outstanding, the invoice(s) in respect of the amount and the breach of credit terms. It requests payment by return or pending payment correspondence to explain the delay.
Up to date and coordinated records are essential to effective debt collection. An audit trail of credit related documents will facilitate prompt payment as well as establishing the indebtedness in the event of late or disputed payments and any subsequent legal action.
If the amount represents more than one invoice a Statement of Account should be enclosed with the letter so that the balance payable can be easily verified. If the debt is not paid a second more strongly worded reminder letter can be sent, the Final Payment Reminder (CDA).
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