The Corporate Insolvency and Governance Act 2020 [CIGA] – which came into force on 26th June 2020 – threw a much-needed lifeline to companies that had been left reeling from the economic downturn brought about by COVID-19.
This legislation introduced a number of temporary measures aimed at relieving some of the pressure that businesses were under, such as extending time periods for the filing of various documents, like company accounts, to Companies House.
While these measures have afforded many businesses vital breathing space, the continuing easing of lockdown restrictions means that Government support is reducing, and therefore businesses that are owed money must consider what action they can take to protect their cash flow.
Review cash flow
In addition to the temporary measures introduced by the Government, many suppliers have granted extra time to customers throughout the coronavirus crisis as a show of goodwill.
However, with the level of Government aid available set to decrease, these businesses need to consider whether they can continue to support customers in the way that they have without seriously affecting their own cash flow.
Take action
If a business decides it cannot continue to support its customers without jeopardising its own interests, it should consider what action it can take to recover what it is owed.
For example, unpaid invoices can be pursued by way of a letter before action, allowing customers 14 days during which to provide a response and suggest a payment proposal.
Generally more than 80% of letters before action prompt a response within the allotted timeframe and payment or a settlement is achieved without the need for Court proceedings.
Blaser Mills Law offers a cost effective debt recovery service, providing companies with an efficient and economical way to collect unpaid invoices and improve their cash flow, with the cost starting from £1.50 plus VAT.
Our dedicated team also deals with insolvency claims and any disputes arising from outstanding invoices or contractual disputes. If you have any questions relating to improving cash flow through debt recovery, please contact Jackie Ray at jar@blasermills.co.uk or Nina Bhatti at nib@blasermills.co.uk, or call 01494 478660.