Recent figures revealed that £30 billion in late payments were owed to SMEs and around 85% of small businesses in the UK have experienced late payment. So anyone running a business is likely to face late payment – and consequent debt collection – issues at some point. Some diplomacy is involved in this process and it’s important to consider the business issues before resorting to litigation; will losing a big client in order to achieve quick payment be worth it in the long run if you end up missing out on future work?
Taking action to collect debt
Late payment legislation exists and imposes a default rate of interest as well as fixed fees – but agreeing on a set of clear terms and conditions at the start of a business relationship to avoid the situation of late payment cropping up in the first place can avoid reliance upon legislation and the souring of a business relationship. A gentle reminder letter can often provide an effective method of chasing up debt without getting heavy handed. Litigation should really be viewed as a last resort option if you have exhausted all other avenues. If a company which owes you money is in a precarious financial situation, allowing them more time to trade themselves out of difficulty may increase the likelihood of being paid compared to taking them to court or issuing winding up proceedings.
A pragmatic debt recovery service
Here at CH Legal, we provide a business debt recovery service that is straightforward, effective and efficient. Our legal team is adept at tackling all types of late payment and debt issues, whether these involve simple invoices which remain unpaid or complex financial arrangements which have been breached. Our debt recovery experts will advise you on the most pragmatic approach in your particular situation. To find out more, get in touch with Rukhsana Arif or call 0845 4786 354.