Late Payment of Commercial Debts
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Excuse 13: Only 1p under payment


This is very similar to excuse 12 as it is a matter of where the line is drawn. Applies where payment was short by a small amount, possibly caught up later.

Underlying reasons

Customer feels a small under payment should not get a penalty
Basically, the customer thinks there should be some tolerance rather than being strict on the terms
An under payment by a small amount is usually a mistake
Customer does not believe they have an obligation to adhere to the agreement they have made
Customer may has a fundamental misunderstanding that they don't have to do what was agreed, but that it is fair to do whatever they can get away with and feels aggrieved that they failed to get away with paying late when they usually do (with other suppliers).


  • Small under payment is usually a mistake. The penalty invoice gets this highlighted quickly and resolved. It may be appropriate to cancel charges in this case but emphasis the importance of not making mistakes. A 1p error is usually people working out VAT wrong (or differently).
  • The issue is that without the penalty invoice, nobody would bother about the 1p, and it can make an account a mess with a long standing 1p error. Better to get it sorted, even if good will crediting the penalty and possibly even the underpayment.

We actually operate a system where anything under £1 is not considered to be late at all, so 1p underpayment or even 99p underpayment we do not pursue a charge even though we could.