At the end of 2017, MarketInvoice published a report investigating over 30,000 invoices from small companies across five years and 80 countries. The report revealed that 62% of invoices are paid after the due date, with one in five not settled until two weeks after they fall due.
Cash flow is especially important to small businesses, so it is crucial they keep on top of invoices to avoid cash shortages.
What to do if invoices are not paid on time?
It is recommended that you follow these simple steps, put together by Aticus Law, should you find that a customer has not paid their invoice in time, or to help you try and avoid the issue completely.
Start by sending a reminder letter. It is a good idea to send a letter a few days before the invoice become due so that you are avoiding the excuse of them ‘forgetting all about it’. You need to be proactive in recovering the debt but avoid getting caught up in lengthy correspondence. If reminder letters are getting you nowhere, you need to consider another method.
Make contact by telephone. If payment is not made within a few days of the due date, contact them by telephone to try and find out why. This will provide you with the chance to come to some sort of arrangement if they are struggling to pay the full amount at once and ensures that you maintain a good working relationship if they are a recurring customer.
Try settling the outstanding amount by using mediation. If the customer has ignored your correspondence and telephone calls but you want to avoid going to court, there are other ways of resolving the dispute. Mediation involves an independent third party helping you and the customer to come to a mutual decision but bear in mind it won’t be legally binding.
Consider taking legal action. You may need to consider involving a solicitor to try and give them a nudge. A solicitor will be able to advise you on what steps to take next which will usually start with sending what is known as a ‘Letter Before Action.’ If you decide to take legal action you will need to gather all invoices and any correspondence relevant to your claim.
Aticus Law have specialist solicitors who can provide you with the right advice on how to recover outstanding debt for your business. Contact their Civil Litigation Solicitors in Manchester today!