According to new research by payment company BACS, small and medium-sized enterprises (SMEs) are owed a staggering £33.6bn in late payments – a rise of 10% over the last year and the highest since records began in 2007.
SMEs are owed an average of £39,000, and are waiting up to two months to get paid, with half of all SMEs in the UK – some 861,000 businesses – currently experiencing late payments.
So, what should a business owner do to minimise the impact of late payments?
– draft watertight terms and conditions, including clear and precise payment terms and a suitably worded provision for the payment of interest in the event of late or non-payment;
– incorporate these terms and conditions into the contract by bringing them to your customer’s attention in early correspondence, in brochures or other marketing material and on any quotation you provide;
– adopt efficient credit control procedures by contacting your customer with a reminder as soon as the payment is overdue;
– adopt cost-effective debt recovery measures – speak to your professional advisors at the earliest possible opportunity.
Ultimately it is pro-active businesses who are the most likely to recover money owed. In many cases there will be no need to go to court, a solicitor’s letter outlining the consequences of non-payment often being enough to ensure that the debt is paid.
If further action is required we can help you obtain judgment against the debtor and advise you on your enforcement options, including:
– Warrant of Execution – which authorises court bailiffs to seize goods from the defendant’s home and/or business;
– Attachment of Earnings Order – which compels the defendant’s employer to make regular deductions from the defendant’s earnings;
– Third Party Debt Order – which freezes the defendant’s money held by a bank or building society, preventing the defendant having access to the money until the debt is paid;
– Charging Order – providing you with the equivalent of a mortgage over land or property owned by the defendant, preventing the defendant from selling his property/land without paying what is owed;
– Statutory Demand – a written demand for the payment of the debt which, if not satisfied or challenged, allows you to issue bankruptcy or winding-up proceedings.
We offer a pragmatic, cost effective debt recovery service and we would be happy to discuss your needs with you. Contact us at firstname.lastname@example.org