Protecting Your Business
During a recession it is particularly important that organisations manage their credit control and ensure all debts are collected swiftly. Late payments can lead to serious damage to cash flow, an increase in borrowing and a reduction in profits – quite quickly turning a healthy business into an insolvent one.
At the same time however, when work is slower to come in and harder to generate, businesses can find it simpler to ease off their procedures when the offer of a new contract is on the cards.
Don’t let your company fall into this trap. Clients and customers will expect a reputable business to have strong credit control procedures in place so they are unlikely to object to any particular terms and conditions – if they do then alarm bells should certainly start ringing!
There are a number of ways you can minimise your number of outstanding debts:
• Get full payment on account to cover any additional outlays that you are going to have to make
• Keep your customer/client informed of your terms of business and payment obligations from the outset and provide them with regular and updated cost estimates
• Invoice at regular intervals and if an invoice becomes overdue do not do any further work
• Statistics show that the longer the delay in chasing debt the more difficult it is to collect – always follow it up straight away
• Run credit checks on significant clients before commencing work
• Check that your terms of business are up to date and protect you – do they include interest on late payments? Should a non-refundable deposit be included?
Once the debts are in place, chasing payment can be time consuming and hard work. A letter or phone call from a specialist solicitor demonstrates that you mean business and often generates a swift response. In fact, 73% of Gill Akaster’s debt recovery clients received payment after sending out the initial letter.
Our Debt RIP service is a low cost, fixed fee service for businesses to recover non-contested debts. Debts can be recovered for as little as £20 +VAT and we can help to recover costs, interest and statutory charges in addition to the principle sum.
Contact our specialist debt recovery solicitor, James Peterson, on 01752 203520 to find out more. Alternatively email james.peterson@gillakaster.com.
James Peterson, Solicitor