When you enter into a contract with a supplier (B2B), you must always make sure to specify the interest rate that you will pay on late payments.
We advise our clients to insert interest rates between 3 and 5% per annum, depending on the value of the contract. However, you should always aim to pay in time in order to maintain a good business relationship with your suppliers.
Many businesses are wrong in thinking that by omitting an interest rate clause, they will not be liable to pay any interests on late payment.
In fact, if the contract does not mention an interest rate, the supplier will be able to apply the statutory interest of 8% plus the Bank of England base rate (per annum) for business to business transactions.
At Optimal Solicitors, we can help you draft commercial contracts to protect your business interests and build long lasting business relationships. Please contact Rocco Limongelli on 0161 250 7771 , who will be able to assist you.