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How to deal with the problem of unpaid invoices

How to deal with the problem of unpaid invoices

For any business cashflow is what keeps it going and unpaid invoices can have a dramatic effect on this. However, spending time chasing up invoices takes you away from the day to day running of the business.

The costs of late invoices

The late payment of invoices can be the downfall of many small companies. If you don’t have the money to pay your suppliers, because you haven’t been paid, it can be extremely damaging.

In the UK we have one of the worst records for paying invoices. According to research from MarketInvoice, a peer to peer lender, in 2015 62% of invoices in the UK were paid late. The European average was 40% and in the US they came in at 46%.

In order for companies to stay in business they are spending large amounts of their time chasing invoices. This prevents them moving the business forward, dealing with marketing and meeting new clients.

The problem doesn’t seem reserved for smaller companies either. Larger customers are also keeping hold of the cash and paying invoices late. Often businesses feel that they cannot chase them, as that’s simply how the system works.

The problem of unpaid invoices

Not only does the late payment of invoices prevent you from paying your own suppliers, it can also hold up salaries. This isn’t a good position to be in and can lead to a reduction in staff morale and even job losses.

A survey of SME decision makers carried out by Tungsten Network, an e-invoicing, invoice financing, and spend analytics provider, found that 23% saw bad debts as putting them at risk of closing.

Why are invoices paid late?

If you’ve ever had to chase late invoices you’ve probably heard all the excuses under the sun. From never having received the invoice to not disputing it till you chase them, there’s always a reason.

Often these provide the customer with extra time to pay, in the hope that you won’t chase them again for a while. Whatever the reason for not paying, it ultimately has an impact on your cashflow.

Chasing unpaid invoices

Nobody wants to feel like they are hassling their customers for invoices, but if you don’t ask you typically won’t get paid.

The first step for chasing clients is to send them an email reminder or statement. This might just jolt them enough to pay, but if not you can follow it up with a phone call.

For customers who still refuse to pay, it’s time for a more formal approach and that’s where we can help. This is a FREE service that we provide to businesses.

Simply forward us your late invoices and we will send out a letter to the customer detailing that if they fail to pay within seven days further legal action can be taken.

This will be followed up by a phone call reiterating the urgency of the matter. If the business has the money to pay, this approach will generally result in the invoices being settled.

We don’t take a percentage of the invoice; our fees are paid by adding a charge for the letter and reasonable recovery costs onto the amount your customer pays.

Where there are cases that they still won’t pay you can act through the courts and register a County Court Judgement (CCJ) against the business. We can also help with this process.

Don’t wait until your cashflow is affected, contact The Bailiff Company today for help with your unpaid invoices.

See The Bailiff Company at Buy Yorkshire

See The Bailiff Company at Buy Yorkshire

The team from The Bailiff Company will be exhibiting at Buy Yorkshire, which takes place on Tuesday 15th May 2018 at the First Direct Arena, Leeds.

We will be meeting customers old and new to discuss your requirements and explain how our services can benefit you.

You may never have needed to work with bailiffs or High Court Enforcement Officers before and be unsure as to what we can do. At the event we will be able to provide you with more information on our traveller eviction work, how we can assist with lease forfeits and commercial rent arrears or what your options are regarding the collection of debts.

If you’re attending Buy Yorkshire you can meet with us on Stand C142. You can also contact us in advance to let us know you’ll be at the event and we can book in a time to see you.

What is Buy Yorkshire?

Buy Yorkshire is the North’s biggest B2B conference and exhibition, with 200 stands and over 4,000 delegates expected on the day.

It brings together executives and stakeholders from across the business community, who are able to meet, network, share experiences and build relationships in the one place. The event is brought together by The Yorkshire Mafia, who are the largest and most active business networking group outside of the capital.

As well as a packed exhibition hall, there is also a varied programme of seminars, panels and workshops for attendees.

When is Buy Yorkshire?

Buy Yorkshire 2018 takes place on Tuesday 15th May 2018 between 9am and 5pm. The venue is Leeds First Direct Arena, Arena Way, Leeds LS2 8BY. There are public car parks nearby and the arena is a 15 minute walk from Leeds train station.

How can I attend?

Entry to Buy Yorkshire is free to attend for delegates. You can register in advance online here to save time on the day, as well as booking your place for any of the seminars.

We look forward to seeing you on 15th May.

How can I recover business debts?

How can I recover business debts?

Debts are a big problem for business finances, particularly those of smaller companies. It’s essential to take charge of these before they get out of control. You can take a number of steps to successfully recover business debts.

The problem of business debts

The late payment of invoices has become a huge issue for many small businesses in the UK. Around a third of invoices due to smaller companies are paid late. The average amount owed for a late invoice is over £6,000 and businesses need to get on top of this to improve their cash flow.

Small businesses can run into difficulties when they have to chase up unpaid invoices. Figures from the Federation of Small Businesses (FSB) highlight that 37% of businesses have experienced cash flow problems; 30% have been pushed into using an overdraft; and 20% have seen profits affected. It can lead to businesses failing in the worst cases.

How to recover debts

The first step to getting payment from a debtor is to contact them. Invoices can sometimes be overlooked, so this is often an effective tool, and companies can hold out till the last moment. You may need to negotiate a settlement or payment plan with them if they are having trouble paying. This approach could be less costly then escalating the issue.

Using the courts to recover debts

You can make a claim against them in the courts if you still have no joy getting payment from a debtor. Once you issue a claim for a County Court Judgement (CCJ) you will incur additional costs. These can be added to the amount the debtor owes.

When a judgement is awarded in your favour, the debtor will be given a period to pay, or the court may have stated it can be paid in instalments. Where a debt remains unpaid after this time you can have it enforced.

How do I enforce a CCJ?

A County Court Bailiff can carry this out with a warrant of execution. Judgements for over £600 can be transferred to a High Court writ and enforced by High Court Enforcements Officers (HCEO).

At the Bailiff Company we can provide this service for you, with costs added to the debtor and a compliance fee returned on successful enforcement.

For more information on our debt recovery services please click here or contact us to discuss your case.