It is important to strike the correct balance when chasing debts, if you are too relaxed then you might not be taken seriously and payment may not arrive; if you are too aggressive you could upset a good customer and lose future business. Remember- a customer is really only a good customer if they pay you!
From the very outset ensure you have written terms and conditions agreed by the customer. Ensure the agreement details the costs, payment terms and credit periods available. This should help you to avoid any dispute with the customer when you are awaiting payment.
The appropriate method for getting paid varies from business to business. The 5 steps below offer a general step by step guide aimed at increasing your prospects of getting paid:
1. When sending the invoice, draw your customer’s attention to when payment is due. Have a process in place so that you know to chase payment when the date passes.
2. As soon as the invoice becomes overdue send a written reminder politely drawing their attention to the date and requesting payment.
3. Within a week of the letter telephone your debtor and try to ascertain if there is a problem. If they are having difficulties consider offering to accept payments by instalments. Record any agreement that is made in writing.
4. If you are not satisfied with the outcome of the telephone conversation write to the debtor again telling them in clear terms the action you will take if the debt is not settled immediately. This could include you stating you will not carry out any further work for them until the account is settled. Inform the debtor that if payment is not made the next communication they receive will be from your solicitor.
5. Finally, instruct a solicitor to write to the debtor, if the debt is still not paid then consider commencing legal proceedings at the county court.
We will write to your debtor for as little as £5 plus VAT and provide a low cost fixed fee service for court proceedings. For more information contact James Harvey.
