Q: I'm finding it harder and harder to get my customers to pay invoices on time or in some cases, at all. Is there any way I can hurry them along without losing their custom?
A: Jonathan Chadwick
There's no doubt that businesses are feeling the pinch at the moment. Cash flow is the lifeblood of any business and credit control is an important aspect of any successful business.
Non-payers might use a variety of stalling tactics so that they can hold on to their money for a few extra days – one example is that the person who signs the cheques is off sick, or the invoice has not been received, or perhaps that the computers are down.
These types of excuses can only last for so long and if you think the problem will escalate, consider taking legal advice. In my experience, sending a letter which tells your customer that you will take legal action if they do not pay in the next seven days, will prompt the majority of non-payers to settle their bills.
This less heavy-handed approach works in around 90% of cases, meaning no further action will be needed and the relationship between your businesses can continue.
But, if the money you're owed is not paid within the allotted time, you could ask your solicitor to issue a letter before action and thereafter issue a claim with either the County Court or High Court if no payment is received. The debtor then has to respond to the claim form, but if they fail to do so, a solicitor can automatically enter a default Judgment often known as a CCJ. This will affect the debtors credit rating if they fail to pay within one month and enforcement proceedings can be started at any time following on from this.