For most businesses, late payers are simply a part of business life, and as long as they do pay in the end, it’s a problem the company will usually find a way to workaround. If you know from previous dealings with the client or customer that they will pay you, albeit 14 or 30 days late, it is unlikely that you will refuse to accept the order. Instead, you are likely to accept both the order and the fact that you will also likely be paid late.
We would define bad payers; as those who evade payment for more than 90 days. They are uncommon and not a problem that most businesses have to deal with regularly. The older a debt, the more difficult it will be to collect and the more likely it will be that the debtor will fold, and your business will be left out of pocket. If your company finds itself in that position, you should take debt collection action sooner rather than later.
It’s Always Good to Hear from a Returning Client
We first assisted our client, a Warwickshire based Haulage Contractor, back in 2017, successfully collecting a debt of £14,628 made up of several invoices up to seven months old within five days of our instruction.
Our client now utilises Advocate’s collection service on an ad hoc basis when their internal process has been completed. There is no annual subscription or account to be maintained. They simply instruct us whenever they need our assistance, and an excellent example of this follows.
Our client returned to us again with a single invoice of £1,920.00. The invoice had been issued to a large Nationwide Construction Company for the transport of building aggregates to a building site. At the point of our instruction, the invoice was 102 days overdue. Our client had been chasing for payment without success for over three months.
Collecting Payment from a Larger Company
A scenario we see far too often, a small company being ignored by a much larger company. The introduction of the Late Payment Legislation was supposed to address this problem. However, many companies, especially larger companies in the construction industry, seem to be unaware of the legislation or choose to ignore it.
We issued a Notice by post and email putting the debtor on notice of possible Court proceedings. The Notice included late payment charges and debt collection costs. When we commenced telephone contact two days later, it took several calls, speaking with several different people in another department to receive confirmation that payment was being processed.
Full payment, including the late payment charges and debt collection costs, was received the next day. Four days after our initial Notice was issued and the day after telephone contact commenced.
We arranged an immediate faster payment to our client, and they were in funds of the full invoice value the same day.
In the vast majority of cases, the threat of legal proceedings from Advocate is enough to prompt swift payment.