A Guide to Unpaid Invoices

Getting unpaid invoices paid is vital to running a successful business.

More about Our Guide to Unpaid Invoices

However, it can be time-consuming and a drain on resources, especially if you are responsible for the day-to-day running of your business. Outstanding invoices can have far-reaching consequences for businesses, disrupting cash flow, which could lead to financial difficulty in some cases, and creating poor working relations among customers and suppliers.

Prevention is, of course, the best way of reducing the pain of unpaid invoices. We recommend that you should already have an effective and proactive credit control procedure in place and have clear terms and conditions for payment.

Having effective and automated credit control procedures in place will mean your customers and clients know they cannot get away with paying late or using your company as a cheap, or even free, source of finance.

Some of our clients use Forbes Collect as an extension of their credit control processes. This can help to maintain positive business relationships, while depersonalising the debt collecting process and it also encourages earlier payments, which will help your business keep cash flow healthy.

Knowing your customer is the mantra of every business, but it should not just apply to your marketing and sales teams; it is also important for your finance department to understand them, and it can be crucial to maximising your return. Important factors to consider include:

The legal entity of your customer. For example, are they a limited company or a sole trader? Their credit history and conduct a risk assessment on the potential customer before they come on board It is always worth getting personal guarantees for directors, where possible Keep up-to-date records. Having clear terms and conditions, which are explained to the customer or client from the outset, is essential for maximising your chances of being paid on time. Ensure that your terms and conditions include the following:

  • Payment terms

  • Late payment terms

  • Timescales for payments

  • Ensure the terms are signed and agreed to as part of a contract before you start doing business together.

Unpaid invoices legal action

Unpaid invoices legal action

If your credit control procedures and unpaid invoice demand letters have not led to your business being paid, then it might be time to take legal action. At Forbes Collect, our debt recovery solicitors can issue an unpaid invoice letter before action. This is a formal letter that requests payment for the debt and warns them if payment is not forthcoming then legal action will be required.

How to collect unpaid invoices from customers?

How to collect unpaid invoices from customers?

If you have unpaid invoices mounting up or have one large unpaid invoice and this is causing your business problems, then it may be time to call in a commercial debt recovery service. At Forbes Collect, we can help you recover your debts quickly and in a cost-effective way. There are three main steps to the debt collection process:

Pre-litigation Issuing County Court Proceedings Enforcement of County Court Judgments

Pre-litigation: letter before action

The first step in the process is issuing a Letter Before Action (LBA). Typically, the vast majority of invoices are paid after the debtor receives a letter that is signed by a debt recovery lawyer. Sending an LBA is an important legal procedure in the debt collection process and not sending the letter and going straight to legal action can mean you may not get all you are owed. The LBA will set out what is owed by the debtor and will outline a set time period in which payment should be made.

County Court Proceedings

County Court Proceedings

If the LBA is ignored or the debtor has not paid up within the set timeframe then we can issue a Judgment, on your behalf. When issuing a County Court Claim, the following will be added to the monies owed; interest, any late payment compensation due, Court fees and solicitor's costs.

Small claims for unpaid invoices are now done through the County Court system. When the debtor receives notification of the County Court Claim made against them or their business, they can choose to either defend the debt or accept it. If there is no response, then a Judgment may be made in their absence.



As a solicitor led commercial debt recovery service, we have several ways of enforcing any County Court Judgments without having to use sheriffs and bailiffs, which can sometimes be seen as an aggressive move; if you wish to use alternative enforcement, we can help you with:

Charging Orders: this is an application to place a charge on the Debtor's property. If successful, the charge will be noted with the Land Registry and the property cannot be sold without you being paid what you are owed Attachment of Earnings: applying for an attachment of earnings order means that a proportion of the debtor's earnings are deducted from their wages by their employer and paid to you until the debt is paid in full Thirds Party Debt Order: obtaining this order means that any monies belonging to the debtor which are being held by a third party (e.g. a bank) can be seized or frozen to cover the debt Order to Obtain Information: this forces the debtor or representatives (if the debtor is a company) to attend a Court date to provide information for your benefit. E.g. bank account details, assets etc. Questions are answered under oath. At Forbes Collect we offer competitive and reasonable debt recovery costs that include fixed fees and transparent pricing. We will always endeavour to get you unpaid invoices paid in the quickest possible timeframe so you can get on with managing your business. Contact our debt recovery solicitors today on 0800 689 4176.

Our dedicated Forbes Collect team

Chris Bowers.jpg

Partner and Head of Department, Insolvency

Chris Bowers

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Paralegal, Forbes Collect

Jack Tasker


Paralegal, Insolvency

Harry Silverman

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