For many small businesses, acquiring new clients and completing projects is just one part of the work. Trying to get paid can be almost as time-consuming!
Tardiness is destroying British Small Businesses
No matter what type of business you run, you’re bound to experience clients who just do not pay on time which can be very stressful on you and your workforce.
New figures from insurance company Zurich reveal that more than half of Britain’s SMEs are currently waiting for overdue bills to be settled, with an estimated £44.6bn in late payments outstanding. They are also warning that one in five UK firms are owed more than £25,000 in unpaid invoices.
So what can you do?
There are a few things you can change in your business to actively encourage payment on time:
- Choose the right payment terms. On average clients pay two weeks late. If you want cleared funds in your bank account within 28 days then change your payment terms to 14 days or less.
- Offer an incentive to pay early. A positive message can help you get your invoice paid quicker. Small discounts are easy to apply if you use accounting systems like QuickBooks.
- Online payment option. This is a must in this digital age using online payment services like PayPal is convenient and also gives your client the option to pay using their credit card.
- State payment terms – clearly, upfront, on all correspondence including the final invoice. Payment due within 30 days is much clearer message than net 30 which is not.
- Introduce a late payment fee. Larger businesses will just ignore this. However, smaller businesses will be motivated at the prospect of not receiving a late payment fee as it will have a bigger impact on their bottom line.
- Politely remind your client. Always try and remind your client about the agreed terms when you send across the invoice. Follow up late payments typically when they a week past due, as in many cases, invoices simply get lost in the shuffle.
Our Managing Director, Chris Lucas-Jones explains our internal procedures:
For late paying clients Absolute Enforcement charge an initial administrative fee of £45, plus we will exercise our statutory right to claim interest (at 8% over Bank of England base rate) and compensation for debt recovery costs under the Late Payment legislation. We state on all invoices Due within 28 days of Invoice Date. We will also not engage in any further work for the client if the account goes over 30 days past due. Tough love is sometimes the last resort. So if you have late payers, come and talk to us, we will help you ascertain the best way to proceed and how to change your internal processes to work harder for you!
Still waiting for your money?
Now is time to ask a debt recovery agency like Absolute Enforcement to act on your behalf.
Even if you have not yet obtained a County Court Judgement (CCJ) you can still speak to one of our team who will provide advice on the best steps to take prior to issuing, to ensure you have the best chance of recovering your debts either directly through our team of Enforcement Agents or via your solicitor.
Owed more than £600?
We would recommend you use the government scheme Money Claim Online service to obtain your County Court Judgement (CCJ).
- You must be over 18
- The debt under £100,000
- Debtor is a maximum of 2 people or an Organisation
Your client will then have 14 days to submit their defence.
Transfer Up to High Court Enforcement Service
If you have enforced on your CCJ but still not received payment, we offer a free ‘transfer-up’ service as part of our High Court Enforcement Services. This free service is the perfect way to manage your unregulated CCJ’s that are over £600 and under 6 years old and allows us to obtain a High Court Enforcement Order.
It is quick and simple just send us a copy of your sealed County Court Judgement. Then make a payment of £66 for the court fee and £30 for the high court office to obtain the Writ of Control before we can progress. The court fee is added to the debt amount owed to you. We can take this payment by BACS or cheque.
Utilising our authorised High Court Enforcement Officers formerly known as Sheriffs. This service allows us to act quickly for every client (creditor). It is particularly ideal where the defendant has goods of value but is refusing to pay as the Authorised High Court Enforcement Officers, Sheriffs principal role, authorised by the Ministry of Justice, enables us to acquire the paperwork to enforce a variety of judgements, including outstanding sums of money, possession orders and other less common types of order.
The best part is that when we recover your judgement and costs in full, we will also collect the £66 costs of escalation. Our fees and charges are paid by the debtor upon successful recovery.
About Absolute Enforcement
We are one of the fastest growing Enforcement Companies operating nationwide. We specialise in the areas of High Court Enforcement; Commercial Rent Arrears Recovery (CRAR); Forfeiture of Leases; Trespasser Removals (including Travellers and Squatters or Persons Unknown); Local Authority Work; Process Serving; Enforcement Support; ANPR Service and our unique Pre-Debt Letter Service.
To instruct us just send us an email to firstname.lastname@example.org today!