Late payer - what are my options?
bizgirl
Posts: 25 Forumite
I run a small business and am awaiting payment on an invoice that was issued back in June. The invoice stated that payment should be made within 30 days. The client paid half the invoice in August but despite numerous email reminders, she still owes me another £200.
I was wondering what my options are at this point. Should I send her an email stating that I will begin charging interest on the debt if I don't receive payment within a certain amount of time?
Any advice would be much appreciated.
I was wondering what my options are at this point. Should I send her an email stating that I will begin charging interest on the debt if I don't receive payment within a certain amount of time?
Any advice would be much appreciated.
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Comments
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have you researched how to operate credit control?
https://www.gov.uk/late-commercial-payments-interest-debt-recovery
you can send her whatever you want, she can continue to ignore it. What then?
if you want to do something more useful you take legal action
but note carefully, even if you win you still have to collect actual money from your debtor. The court won't pay the debt for you. You may need to appoint bailiffs to seize her goods, and there is no guarantee the bailiffs will succeed either0 -
Thanks 00ec. From what I understand from that link, I could charge her a one-off fee of £40 plus daily interest of about 5p a day.
The threat of 5p a day isn't exactly going to incentivise her to pay, is it?
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indeedThe threat of 5p a day isn't exactly going to incentivise her to pay, is it?
part of being in business is knowing when not to throw good money after bad and instead just write off the debt and take it as tax relief instead.
you can still continue sending e mails for another 6 years (statute of limitations) even after writing it off, and she can carry on ignoring them.
No one is going to ride to your rescue when you are dealing with business to business as you are expected to be commercially minded yourself and to have factored that into your business plan. Accept that a certain level of risk is inherent in what you are doing, carry on chasing by all means, but know when to stop.0 -
I'm guessing that's 5p per day, not compound interest ...Thanks 00ec. From what I understand from that link, I could charge her a one-off fee of £40 plus daily interest of about 5p a day.
The threat of 5p a day isn't exactly going to incentivise her to pay, is it?
You might want to revise your invoice template to include what happens if payments are late.
You know your client better than we do: as 00ec25 says the next step is probably legal action, probably through the small claims court, starting with a Letter before Action (LBA). For some people, that would be enough to push them to pay, because if they don't, there are consequences for them. But that still doesn't necessarily get you your money.
So before you do that: is she a 'won't pay' or a 'can't pay'?
Is there any dispute about what is owed?
Have you tried picking up the phone? Maybe your reminders are going into her spam folder and she's not seeing them ...Signature removed for peace of mind0 -
She has responded, so my emails are definitely getting through. She has disputed owing the money but I have cast iron proof in email exchanges that she owes me this amount, so I’m not worried on that front. It’s just incredibly frustrating/upsetting when people don’t pay what they owe - not to mention a huge waste of the small business owner’s energy and time. I’ve never had a bad debtor before either - perhaps I’ve been lucky.0
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Possibly a bit late now as your posts were about 10 days ago, but when we ran into problems like this we used to print out the money claims forms, fill them out and send them to the other party. It tended to spur them into action in most cases without you having to actually pay out anything or go through the Court process. And, of course, if it didn't you just need to send the forms off. Might be worth a try, nothing to lose.
But...for new clients, or future orders from late paying clients, we moved to payment up front. Put it in your quote and stick to it. Once they've established a payment history you can move to 30 day invoices.
Oh, and don't wait wait 5 months before doing something about it in future!0 -
She has responded, so my emails are definitely getting through. She has disputed owing the money but I have cast iron proof in email exchanges that she owes me this amount, so I’m not worried on that front. It’s just incredibly frustrating/upsetting when people don’t pay what they owe - not to mention a huge waste of the small business owner’s energy and time. I’ve never had a bad debtor before either - perhaps I’ve been lucky.
If she disputes owing the money, then that is a little different from a straight-forward late payment. If she keeps on disputing it, your only remedy is to go to the Small Claims Courts I suggest.0 -
I'd say threat of Small Claims Court is often enough to spur them into action. Especially over an amount that small (I know it's all relative, but it's unlikely she couldn't possibly pay, it seems more like from what you say that she doesn't want to).
I seem to remember from around 15 years ago when I had to do this, you have to disclose your evidence up front and (I believe, but time makes things hazy), they get to see what you have on them. In that case, it's possible she'll just pay up before the court date. When I did this, they left it to the last possible date to settle before the court date, but they knew they didn't have a leg to stand on.0 -
I run a small business and am awaiting payment on an invoice that was issued back in June. The invoice stated that payment should be made within 30 days. The client paid half the invoice in August but despite numerous email reminders, she still owes me another £200.
The terms stated on the invoice are of little relevance as this is issued after the fact. What are the credit terms stated on your contract / business agreement with her?
I was wondering what my options are at this point. Should I send her an email stating that I will begin charging interest on the debt if I don't receive payment within a certain amount of time?
You should have escalated before now. Send a Letter Before Action now and follow up with action in the small claims court if the invoice is not settled.
Any advice would be much appreciated.
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PatrickJohnson wrote: »I'd say threat of Small Claims Court is often enough to spur them into action. Especially over an amount that small (I know it's all relative, but it's unlikely she couldn't possibly pay, it seems more like from what you say that she doesn't want to).
I seem to remember from around 15 years ago when I had to do this, you have to disclose your evidence up front and (I believe, but time makes things hazy), they get to see what you have on them. In that case, it's possible she'll just pay up before the court date. When I did this, they left it to the last possible date to settle before the court date, but they knew they didn't have a leg to stand on.
You disclose evidence before a court hearing, but not upfront.0
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