Article by Diane Bantten of Aquit Debt Recovery first published in July 2012 edition of Compass Wessex.
What about the client that starts off brilliantly, offers you new work frequently, pays on time and gives you repeat work – ideal! However, it seems to be more and more prevalent that that ideal client is starting to pay later and later, your credit control procedures may say chase after 30 days – how many of you are still waiting for payment after 90? Do you carry on working for them or do you put them on stop OR are you so frightened of upsetting them that you do nothing? To my mind, a client that doesn’t want to pay for your service or is unable to isn’t an ideal client at all!
Let us presume that you have your T & C’s in place, and that one of your terms is that payment of your invoice should be made within 14 days. If your invoice hasn’t been paid on time, why don’t you make it part of your credit control procedure that you call them? People really don’t like talking about money and it’s even worse when they know that they owe you money. At this stage if you are offered an excuse more than likely you have a “can’t pay” on your hands. Diarise the matter, call them back in a couple of days if payment still hasn’t been received and offer them an instalment agreement. If however, they offer you a complaint, and that complaint is without foundation, then in my experience its more than likely that you have a “won’t pay” on your hands.
So you’ve established that they won’t pay – what next? The obvious answer to this one is to contact a specialist debt recovery practitioner like myself! However, if you have the time and resources to deal with it yourself you need to (i) calculate interest owed (ii) add late payment compensation and (iii) make a formal demand for payment.
In my experience it pays to seek professional advice at the point of non payment. Your customer will often sit up and pay attention when they are contacted by a third party seeking payment on your behalf. A third party can assist you in maintaining a good relationship with your client who should understand that in these tough times cash is king and we all deserve to be paid on time!