Below are some steps you can take to help you recover outstanding invoices.
Agreement
include price and payment terms in the agreement with the customer. You should make sure the agreement is signed off by both parties to ensure that it is binding. The recovery of the debt will be in accordance with the agreed terms. Putting the payment terms on the back of an invoice, without a formal agreement, will generally not be sufficient to prove a binding agreement.
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.
Contacting debtors
You should remind customers 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.
Payment options
If 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.
If the debtor is unable to make the payment agreed, consider whether they are able to offer any securities. There are various forms of security that can be agreed . Alternatively consider if you have a retention of title clause you can rely on where you remain the legal owner of the goods until such time as payment has been made.
Review the reasons why the invoice has not been paid – If it is because 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 claims, then they must make payment or you are entitled to issue legal action for recovery.
