Credit Control and the Increase of Unpaid Invoices

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16 October, 2020

Sophie Jackson

The increase of unpaid invoices has no doubt had an impact on the workload of those within credit control. As the department gets busier, you should have an effective credit management system and procedures in place to ensure that you are keeping on top of the status of all outstanding invoices and the ever so important cash flow.

However, even with the most robust credit control procedures in place, many businesses still find themselves struggling to collect payment of outstanding invoices and that is why, even more so during these difficult and uncertain times, we would recommend the following:

Keep communicating

Keeping communication lines open and regularly chasing your customer for payment will ensure that your invoice does not slip through the net and go unnoticed. Regular communication will also help you understand the debtors financial situation and whether they are just avoiding payment or in genuine financial difficulty.

Have a clear, well publicised policy

Having a clear, publicised policy available for all staff to adhere to will ensure that there is a process in place for those unpaid invoices and the necessary action is taken sooner rather than later, we would always recommend a proactive approach as opposed to a reactive approach in order increase the likelihood of recovering monies owed.

Be pragmatic

It is more often than not the case that many invoices go unpaid because the debtor has found themselves in financial difficulty. It is therefore worthwhile to consider any reasonable offers of payment by way of instalments or a settlement amount to ensure that you receive as much of the money you are owed as possible. The chances of recovery unfortunately decrease when the debtor enters into administration.

Do not be afraid to take legal action

Many businesses are afraid to take legal action against debtors because of the sensitive nature of requesting payment of money and the fees that they then may incur. However, this is unfortunately sometimes the only option available to you, if the money you are owed is rightfully yours then you should not have to put your business at risk because of unpaid invoices.

Further, the statutory interest and compensation that we are entitled to add onto the debt and claim from the debtor (should you not have any alternative agreements) often heavily alleviates any fees that you incur for such action.

Within Forbes Collect we can assist you with the recovery of unpaid invoices on both a large volume of cases or an ad hoc basis, our expert Debt Recovery team will ensure that the Debtor is pursued with maximum amounts of pressure, taking the pressure of your workload and business alongside enhancing the likelihood of recovery.

For more information contact Sophie Jackson in our Forbes Collect department via email or phone on 0333 207 1135. Alternatively send any question through to Forbes Solicitors via our online Contact Form.

Learn more about our Forbes Collect department here

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