Fact: 50% of Businesses Fail After 5 Years Due to Their Cashflow Drying Up
It’s a sad fact, but it’s true. Yet, it’s actually worse than the above.
So, if your customer fails to pay you, what can you do? Firstly, ensure you know the actual reason that you have not been paid - there are many reasons this could be. The most common are...
- They haven’t received your invoice
- Your invoice is incorrect
- They are not happy with your services or haven’t received them
- They are using delay tactics
- They are waiting for payment from their own customers
- They have they gone bust
My Customer Will Not Pay Me
If your customer is delaying payment there are a number of things you can do:
- Re-issue the invoice, ensuring all details are correct: payee name, address, PON, amount, itemising, VAT etc
- Find out who the signatory is and when they are next in if payment is by cheque, or the lead Credit Controller
- Telephone and send a reminder letter/email to chase payment
- Send a solicitor’s letter after you have sent three previous reminders
- You could use a debt collection agency to chase on your behalf
If you are regularly experiencing late payments, you could consider adding a term to your contract that adds additional charges to overdue invoices under the Late Payment of Commercial Debts (Interest) Act 1998.
My Customer Has Gone Bankrupt
If your customer has gone bankrupt, gone into liquidation or has ceased trading an Insolvency Service will be appointed to deal with outstanding debts.
As a creditor who is owed monies you will be contacted by the Insolvency Service, asking you to complete a proof of debt.
However, this can be a long winded and timely exercise that gives priority to outstanding debts through a strict hierarchy scheme, compensating those only whilst funds raised from selling the former company’s asset exist. Full details on the effects of liquidation or administration of your customer can be found on our dedicated blog article.
Invoice Factoring = No Chasing & Covering Bad Debt
Our invoice factoring facilities avoids any need to chase overdue invoices. We deal with all the back office credit control areas to your invoicing.
As well as paying you up to 90% of each and every invoice you issue, within 24 hours, paying the balance when your customers have paid, we also deal with all the back office administration. Our secure online portal makes it easy to see what invoices you’ve issued, what monies have been advanced and what invoices are still owed by your customers.
Also included is bad debt insurance that sees your invoices protected should your customer go out of business or not pay you.
Protect Yourself against a Cashflow Drought
Join over 44,000 UK businesses using invoice finance companies to keep their cashflow fluid. Our award winning invoice finance and confidential invoice discounting will take the stress of failure out of your accounts!
Call us today on 01908 268888 for details on invoice factoring costs and no obligation factoring quote.