So it’s been 30, 60 or even 90 days and your invoice still hasn’t been paid. You may begin to worry if you will ever recover the money you’re owed and slowly as the days go by panic sets in. How am I going to get my money back? What can I do if they aren’t returning my calls and emails? How badly is this going to affect my cash flow?
Do not worry. Here we are going to go through some of the actions that you can take to get paid.
First of all you’ll want to gather as much information from previous emails, past payments, invoice dates and generally all dealings with those who owe you. Then think to yourself how much you are owed, why they haven’t yet paid, is it worth taking action and whether or not you have good grounds to act on. If you have access to credit a credit agency, which normally comes with a cost, it may also be helpful to check their rating and for any outstanding bad debts.
Keep up communications even if they aren’t responding since this shows an attempt to find out what their issue is and prompts them to get back to you. You may send them a warning message where you outline the fact that you are not delivering the product or service until you receive some indication of payment. Keep in mind that all of the above is to be done still in as friendly as tone as possible. There may be a reasonable legitimate reason why they are late and you probably want to avoid putting strain on any future business relationship with them. You may remind them that interest may be charged on payments overdue and also you should check if they have signed the Prompt Payment Code as this may be they will be reinvestigated. If they have signed, maybe remind them of this. Initially when entering into a contract with someone who you perhaps haven’t worked with, I would suggest you clearly lay out the payment terms with a scenario such as this one in the back of your mind.
If after sending numerous reminders, mentioning interest payments and the PPC you still receive no response you may get a bit stressed and worried. At this stage legal action may come to mind which honestly probably adds more stress due to the extra time, money and effort that comes with it. Another option that ties in with this may be considering Debt Collection Agencies. It can be difficult to decide which one to use with some having a better reputation than others, but essentially they will save you time and effort and methodically go through the legal processes necessary to try and get you paid. While they may charge you a small fee of the amount recovered it takes away the hassle and allows you to put more attention on other matters within your business.
Ultimately though in the UK the issue of late payments continues to be a pain for SMEs and larger companies alike. It remains unresolved and somewhat overlooked and is something that needs to be fixed in the near future. After all, SMEs are the backbone of the UK economy and if they thrive, supposedly we all will.
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