How to keep late payments to a minimum

Completely avoiding late payments is probably not realistic but there are ways you can minimise it.

Here is our checklist for effective credit control:

  1. Have a clear credit control procedure:
    • As soon as payment is late send a seven day demand for payment
    • Follow this up with a phone call, which will help to flush out any disputes or problems with the invoice
    • As soon as your set credit control period has ended pass the debt over for legal action do not delay.
  2. Know your customer and obtain as much information about them as possible at the outset:
    • Who exactly are you contracting with? A sole trader, a limited company or a partnership? Simply having the name of the business e.g. the shop name or restaurant name is not enough. You need to know who owns the business.
    • Credit check customers where possible
  3. Have clear terms and conditions
    • Ensure that your payment terms are set out in your terms and conditions
    • Have a signed order form or agreement on record

How to keep a good relationship with your customers when dealing with debt

It can be tricky dealing with late payments whilst maintaining a good relationship with your customers or client. One way to depersonalise the collection process is by instructing a solicitor led debt recovery service such as Forbes Collect.

Inform debtors that the decision to take legal action is not personal and is out of your hands. It is sometimes a requirement of insurance that legal action is taken to recover unpaid invoices after 30 days.

In most cases this won't do any damage to your business relationship; however, if late payments persist, it might be worth thinking about whether you actually want them as a customer.

For more information or to instruct us today, contact Forbes Collect on 0800 689 4176 or email us on forbescollect@forbessolicitors.co.uk.

Forbes Collect

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