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Cashflow is the lifeline of any business. It seems to be a vicious circle, with A not paying B within the agreed credit terms, which has a domino effect on C, D, E etc. The application of a late payment surcharge, clearly written into your terms and conditions sometimes helps, as does the sending of statements and letters.
If all else fails, court action is a last resort, and should only be taken after the correct protocols have been followed. Your debtor may himself be experiencing cash flow problems, in which case you could perhaps negotiate a repayment plan. Very often your debtor wants to pay, but financial constraints don't make this possible.
The service we provide usually involves sending a reminder letter and requesting payment within seven days. If we don't receive any response from this, a letter threatening court action is sent. Throughout these procedures we will make telephone contact if possible to try and ascertain when payment will be forthcoming, and also to ensure there aren't any issues which are delaying payment. If the debt remains unpaid, a pro-forma county court form is sent with a letter notifying the debtor of intention to commence court action.
Fees for county court action start at £30.00, depending on the amount of the claim, and are payable by the debtor. It should be mentioned that even once county court judgment has been awarded in your favour, you still may incur further costs trying to recover the money.
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