By brocs1, Jun 23 2020 12:30PM
With the economic uncertainty surrounding COVID-19, cash flow is more important than ever. You might be looking for cash to help keep your business afloat, but your customers will likely want more time to pay, no-one likes to feel like they are constantly hounding another for something and that is even more so the case when it comes to chasing late payments. There are steps you can take to help you recover outstanding invoices.
• Invoice – You should invoice as soon as possible, the quicker you send the invoice the quicker it will be paid. Also make it easy to get paid, ensure it is a simple and straightforward, accepting online payments provides convenience for the customer to pay at their convenience especially if you are also operating restricted hours.
• Contacting debtors during lockdown – It may be that the debtor is in lockdown and therefore harder to get hold of. You should check their website and emails for any reference to this, many companies have notified customers of temporary changes on how to reach them. Just because they are not working at their usual place of work does not mean they are not working at all and are likely to have access to their emails. Therefore, you should remind them about the outstanding invoice and ask them if there are any reasons why they have not paid, you should try to get as much information as possible in order to discuss possible solutions.
• Written confirmation of the claim – When a customer cannot pay their invoice in full but still wants to make payment, they may propose a payment arrangement. This means they will pay the outstanding invoice in parts over a set amount of time. You are under no obligation to accept a payment plan however if you do you should ask the debtor to confirm in writing the payment proposal, this provides you with their acknowledgment that they owe the amount you are claiming but also details the instalments, any interest and consequences of non-payment.
• Review the reasons why the invoice has not been paid – Is the non-payment or delayed payment due to the knock-on effect of Covid-19 or are they fully operational? If it is due the current pandemic that they are no longer financially able to fulfil their agreement you can ask for proof such as evidence requesting government support or a statement from a third party such as an accountant. If the debtor is unable to substantiate their claim, then they must pay the invoice
• If the debtor is unable to make the payment agreed, consider whether they are able to offer any securities. here are various forms of securities that can be agreed such as a retention of title. If goods have been delivered and you are the legal owner of them, you can retrieve them if the invoice has not been paid and they can remain on your property until full payment is received.
Summerfield Browne have offices in Leicester, Birmingham, London, Oxford, Cambridge and Market Harborough.
Contact us for further details on 0800 567 7595 or email us on [email protected]