Debt Recovery Lawyers, Liverpool
For businesses of all sizes, the key to healthy cash flow is ensuring that customers and clients pay invoices on time. Late payments for goods and services can have long-lasting, harmful consequences. When a business owes you money, you should always try to resolve the matter amicably – and there is a range of steps to help collect debts without a court order. Court action should always be a final resort.
The sooner you deal with outstanding payments, the lighter the impact will be on your business. For immediate, clear and strategic legal advice for your debt recovery situation, contact our Debt Recovery Solicitors today.
When should I start the debt recovery process?
You should begin pursuing the debt if payment is not made on the agreed payment date. An agreed payment date will typically be within 60-120 days for business transactions, but some contracts may provide for more time. It is worth noting that an agreed payment date of longer than 30 days must be fair to both parties.
If you have not agreed on a payment date, payment will be late 30 days after either:
- your customer receives your invoice; or
- you deliver the goods/provide a service, if this is later.
I have not received payment on the agreed date – what should I do?
Your first step should be to write to your debtor to let them know they have missed their payment. The missed payment may be the result of genuine oversight, so you should do this politely to avoid damaging your commercial relationship. They may also have an issue or complaint regarding your goods or services – resolving these issues quickly can mean that the outstanding payment will be made sooner.
If your debtor is experiencing cash flow problems themselves, you might consider offering them the chance to pay off the sum in instalments. Our Commercial Debt Recovery Solicitors can assist you in contacting your debtor and support you in negotiating a settlement that is fair to both parties. We can advise on Alternative Dispute Resolution options that may be appropriate, such as mediation or arbitration, to help achieve a positive outcome quickly and easily.
What is a credit hold?
If you provide goods or services on an ongoing basis, you might want to stop doing any work for them until they have paid you what they owe. This is known as a credit hold or administrative hold. This can have a big impact on your debtor's business and may encourage them to prioritise your payment.
My debtor has still not paid – what should I do?
You should send your debtor a letter before action informing them that, if they fail to pay within a specified time, you will take legal action. If the debtor pays within this time, the matter will be closed. If your debtor does not respond or disputes the debt, the next step is to take court action.
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