Late Payments

It’s the moment we dread – that big invoice we needed to be paid on time hasn’t been paid

and now we are panicking as there are bills that we need to pay, and we don’t want to be

that business who pays our suppliers late because we were paid late.


Not getting paid on time is a pain that we don’t need regardless of whether we are hand-to-mouth or have cash in the bank. But going in heavy-handed straight away quoting your legal rights isn’t necessarily the right approach as you don’t want to ruin any business relationships in the process.


STEP 1 – POLITE REMINDER

I have clients who send a reminder that an invoice is due a couple of days before the

payment date, they send a nice polite email to say:


"Hi – I am sure it’s all in hand but just a reminder that our invoice is due for payment on … a

copy is attached for your reference, if you had any questions or queries then please reply and let me know."


Sending pre-payment reminders might not be your thing. But if the invoice isn’t paid on time

then on the next day send a polite email to say:


"Hi – Our invoice was due for payment yesterday (or state the date), please can you let me

know within the next 3 days when payment will be made so I can make a note on our

system. A copy of the invoice is attached for your reference. We value your business, but

would like to remind you that our terms are .. days and as a small business being paid on

time is important to us."


STEP 2 – FOLLOW UP

If you haven’t had a reply within the 7 days (or however many you have given) send a follow

up, there are a couple of options:


Do you want to offer a payment plan?


"Hi – I am following up on my email of (date) requesting confirmation of payment of invoice

number … dated … and due for payment on date … This invoice is now … days overdue. If there is an issue with making payment please let me know and we can look at whether a payment plan can be put in place for you"


Or do you want to look at the next steps and take legal action to recover?


"Hi – I am following up on my email of (date) requesting confirmation of payment of invoice

number … dated … and due for payment on date … This invoice is now … days overdue

and if we do need hear from you within the next 7 days we will look to take legal steps to

recover the monies owed."


The way to go is a personal decision and will depend on the amounts involved, the business that owes you money and your relationship with them.


STEP 3 – DON’T CHICKEN OUT!

If you have said you will look to take legal steps – then do it!


There are two options:


Letter before legal action – this is still a legal letter but states that if payment is not made within 7 days court action will be taken to recover the debt.


Late Payment demand – this will detail the compensation and interest that is due on the late payment.


If these don’t result in payment then it’s a case of taking them to court, again you can do this

yourself or you can appoint a solicitor to do this for you.


Contact us for assistance with debtor recording and invoicing.


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