An offer to waive interest needs a clear expiry and account scope

A waiver can be broader than intended

A late-paying customer asks you to drop the interest if it pays the invoice. Before agreeing, identify exactly which charges the offer concerns and what must happen for the concession to apply. Have the terms reviewed where needed. A short message saying interest waived can leave uncertainty about later interest, other invoices and the principal balance.

Separate the components in the offer

Imagine a supplier agreeing to waive identified accrued interest if the customer pays a particular invoice by an agreed date. State the invoice reference, principal amount and interest covered. Ask whether the proposed wording also addresses interest accruing before payment clears. Do not assume both sides understand the same outcome from a round settlement figure.

Document the agreed change

business.gov.au recommends recording contractual changes clearly. Keep the waiver proposal, acceptance and any conditions together with the original terms. Obtain advice about enforceability and the effect of missed conditions. Avoid adding a purported penalty or reinstatement provision without review simply because you want the customer to take the offer seriously.

Source: business.gov.au: Prepare a contract

Check what happens after a part payment

In the supplier example, the customer may pay only part of the principal before the proposed date. Record the actual receipt and seek advice about the agreed consequences rather than improvising a new balance. Do not issue a full interest credit automatically if the concession depended on complete payment and the position remains unresolved. Equally, do not ignore a valid agreed concession.

Keep future trading terms distinct

An arrangement for one overdue invoice should be assessed separately from the terms for later work. If the customer requests a wider change, make that request explicit and have it reviewed. Tell the accounts team which invoices and periods the agreement covers. A recurring interest rule may need an authorised adjustment so later statements reflect the actual agreement.

Reconcile the completed arrangement

Once the relevant payment and conditions are confirmed, record the proper credit and remaining balance. Send a clear statement through the agreed channel and retain the evidence. A useful waiver removes a defined obstacle to recovery. It should not create a fresh dispute about whether the supplier abandoned all interest, released principal or changed the entire customer relationship.