As a business, no matter the size, it is vital that you are paid what is owed to you by customers and clients. Late payments or avoiding payment altogether for goods and services is an issue for a lot of our clients. Non-payment can be incredibly challenging for your cash flow.
Managing your debtors effectively is key for any business. We set out below a number of steps you should take to effectively manage your debtors.
Whether they have been sent previously or not, each request for payment needs to be accompanied by the relevant invoice and purchase order (if appropriate). This works as the paper trail should you need to subsequently escalate the matter. Prior to the first invoice, you and your customer should have agreed upon payment terms.
If after invoicing you have not received payment it is important to chase the customer. Sometimes emails do get lost or are overlooked. The process of sending reminders could either involve sending further emails or chasing up via a phone call. We suggest keeping a note of the call on the file. If the customer is ignoring your calls, keep a note of when you rang as you might need to refer to it subsequently.
If payment is being withheld for any length of time without reason, you should consider whether you ought to stop any further work for this customer. You may not be able to stop work immediately (due to the nature of the contracted relationship) or you may have a longstanding relationship which makes it difficult to stop work however you need to bear it in mind, at least as a threat.
If this doesn’t work, then seeking other forms of resolution must become your next step without delay.
A final notice, in all likelihood, maybe the last correspondence that you send to a customer prior to taking action against them. This should outline a time period or deadline in which to pay the amount due including interest and any further costs or expenses that may be due.
If the final warning is not successful, then you need to consider legal action.
You have two options – legal proceedings or the insolvency route. There are advantages and disadvantages to both options and we can guide you through the choices. At Pannone Corporate, protecting your business is important to us.
We have years of experience in looking after the legal needs of a wide range of clients; including many household names such as Boohoo.com, DHL, Iceland Frozen Foods and L’Oreal. Our debt recovery team can help you to successfully recover business to business debts and can be contacted at our Manchester office on 0800 131 3355 or via the contact form.