Don’t be a statistic
Unpaid Invoices can be the death of your business; here is some simple advice on how not to be a statistic.
Check out who you are looking to trade with BEFORE you trade. If you don’t get the basic facts right to start with you will be unable to invoice correctly, recover overdue amounts effectively and it could very well prevent you taking legal action.
Your cash flow relies on you getting paid promptly for goods or services you have provided – cash flow enables you to continue trading. Ensure your terms of business (which you will have agree in advance) and your invoices clearly state date payment is due and the consequences of late payment, namely your right to late payment and interest charges. Do not provide free overdraft facilities to your clients – unless of course your bank is providing the same to you (are they?)
Promptly raise invoices – this is an essential task for your business and vital for your cash flow and should be given the reverence it deserves. Check your invoice is correct first time and includes ALL the details your client requires, reissuing or raising credit notes is time consuming and costly. All invoices should be sent 1st class post or even better via email (with a read receipt).
Don’t be afraid to ask for what is yours- you have provided goods and/or services and you are contractually obliged to be paid for them. Act quickly as soon as payment is overdue – if your client is struggling you want to be first on his list to be paid. Be assertive and clear about what you expect and when you expect it. If you have to allow them extra time make sure you follow this up on the date you agreed, pointing out the consequences (as per your terms of business) if payment is not forthcoming.
If you have done everything you can and you still have not been paid your only recourse may be legal action. This is often deemed as expensive and a waste of time and even worse as throwing good money after bad. This is not the case.
Check out your local debt recovery solicitors – most have fixed fees and will offer free initial advice. A good solicitor will not allow you to throw good money after bad – if your debtor has no funds or assets then there is no point – write the sum off and claim the tax relief. If, however, your solicitors investigations prove there is an ability to pay just no inclination then a letter before action can cost less than most peoples hourly rates.
You should be consulted at every stage of the recovery process to ensure you understand what is happening, why it is happening and how much it will cost you. If your terms of business are correct any cost of recovery will almost certainly be recoverable from your debtor, so they will be footing the legal costs not you.
Around half of all UK SMEs will experience late payments each year Unstructured payment practice costs UK businesses around £20bn annually 25% businesses go insolvent due to their clients late paying of invoices Millions of unproductive man hours are lost annually by companies chasing overdue invoices.
Don’t be a statistic AMS Solicitors specialist debt recovery, litigation and property lawyers
AMS Solicitors – Local Solutions, City Expertise, National Coverage
Wentworth House, 1B Fairways Office Park, Pittman Way, Fulwood, Preston, PR2 9LF
Telephone 01772 653333