Litigation should always be a last resort.įor debts worth more than £750, you may be able to issue a statutory demand for payment. Mediation may also provide a cheaper solution if there is any dispute. Before contacting a solicitor, send the customer a “ Letter Before Action” telling them you intend to take them to court if they don’t pay within a specified period (eg seven days). A late-paying customer could themselves have serious cash-flow issues, and constant broken promises and ignoring your calls or emails aren’t good signs.īefore you personally take legal action against a customer for non-payment, first consider whether the debt is worth pursuing in court. Typically, you receive 90% of their value from a lender, then the balance, minus the lender’s fee, on payment. It can enable you to quickly raise cash against your unpaid invoices. If so, invoice finance may provide a solution. Habitual late-payers may create cash flow pressures, but their custom can be worth retaining. Any extensions should be an exception, not the norm. If a customer is obviously using delaying tactics (e.g “You’ve missed the payment run”, “Our payments person is on holiday”, etc), politely remind them of your credit terms and ask for a payment date. If not, explain why and firmly request immediate payment. Investigate their claims and resolve them if you’re at fault. If they do, it could be a delaying tactic. Post due date, a customer shouldn’t suddenly raise an issue about your invoice or product/service quality.
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