Late payments are often a source of immense frustration for owners of Small and Medium sized businesses with bigger companies often being the ones most responsible for such late payments. The issue is even more serious in the current climate with pressures of cash flow affecting all types of businesses on a daily basis.
However, there are things business owners can do to take control:
- Have clear and concise payment terms.
- Consider negotiating terms that anticipate some delays leaving you with some head room.
- Issue prompt invoices.
- Send late payment reminders.
- If you have the benefit of contractual terms for late payment, use them. If you don’t, you might be able to rely on the Late Payment of Commercial Debts Act 1998.
- Claim interest and your recovery costs and/or compensation where applicable.
- Take further action without more delay. If payment is late and there is a lack of communication, then instruct a solicitor to pursue payment. A letter from a solicitor is often enough to prompt payment.
- If all else fails, a solicitor can pursue the matter via the Court if necessary.
At BWL, we understand that business owners can often be reluctant to take legal action against their customers of clients as it may affect the relationship you have with them. However, debtors will often test your tolerance for late payments and seek to improve their cash flow at your expense.
In our experience, being proactive in the case of late payments is always the best way forward.