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How To Avoid Late Payment of Commercial Debts – Top 3 Tips

Late Payment of Commercial Debts

How To Avoid Late Payment of Commercial Debts – Top 3 Tips

Is your business suffering from the late payment of commercial debts? If so, you need a debt recovery service that can help you to recover outstanding debts.

When working for a Business-to-Business organisation, it is extremely common to encounter late payment of goods or services every once in a while.

In 2019, research collated by SME Invoice Finance noted that there was around £23.4 billion owed in late payments.

There are many excuses as to why someone may not show a payment forthcoming, including:

  • Genuinely forgetting that the invoice payment due date
  • Disputing an invoice due to a mistake, for example, a wrong name or email address
  • Cash flow difficulties have pushed your payment to the back of their priorities
  • The client has no excuse other than they had no intention to pay you in the first place

Regardless of the excuse, it is grossly unfair to not be paid if you have carried out services or provided goods to a business.

It can be detrimental to your business if you do not take action as soon as a client misses their payment date.

Knowing how to take action when faced with a difficult client who is not paying you on time is extremely important.

Avoiding Late Payment of Commercial Debts | Get Expert Help From Debt Collectors Now

If you need help with a Debt, our friendly team of Debt Collection Experts is happy to help you today,

SPEAK TO A DEBT COLLECTION EXPERT

Late Payment of Commercial Debts (Interest) Act 1998

The Late Payment of Commercial Debts (Interest) Act 1998 states that if services or goods are unpaid, the business has a right to claim statutory interest on the overdue payments.

This may sound positive, as you are able to get back more than you are originally owed, however, there are more disadvantages to this than advantages.

This is not only costly in terms of time and resources needed to go through legal proceedings, but it can also take a long time to produce a result.

If you claim interest on the original value, this does not always guarantee that the client will pay what is owed.

If a client was refusing to pay the original value, it is likely that they will be even less inclined to pay the higher one.

In this article, our team of Commercial Debt Collection experts have put together a list of key facts on how to avoid late payments and what to do should these occur.

Late Payment of Commercial Debts Late Payment of Commercial Debts

Top Tips for Avoiding Late Payment of Commercial Debts

Payment Terms – Confirm Prior To Works Starting

Most businesses may have a dedicated credit control team that deals with the financial aspects and accounts of the company.

A process known as Payment Terms can be implemented into credit control procedures before services are provided.

These terms are usually set out at the beginning between the business and the client, and outline when and how much the client is due to pay.

Payment dates are usually within 30 days for public authorities or 60 days for business transactions.

We recommend getting both parties to sign these, as this should eradicate any payments becoming late in the future.

Monitor Your Client’s Credit Ratings

Another common practice within a Credit Control Team is to ensure new clients are credit checked prior to working with them.

If a client’s credit rating is green, this will give you a good indication of whether they have a history of paying on time.

These can change at any point, however, so it is good to regularly check these through online credit checking tools such as Experian or CreditSafe.

Communicate With Your Clients

We recommend that you contact your client on a regular basis to ensure the work you carried out was of a high standard and to remind them of an upcoming payment.

This can go a long way when it comes to a client paying and will help to grow the relationship between both parties.

It is a known fact that your clients are more likely to keep up to date with their payments and pay on time if the payment process is user-friendly.

It is important to remain professional and friendly when communicating with your clients.

Commercial Debt Collection Agency – Federal Management

If the above has failed to produce a payment, then it is recommended to instruct a professional Commercial Debt Collection Agency.

At Federal Management, we are industry-leading experts when it comes to recovering late payments from customers that will not pay.

We provide industry-high recovery rates of 90% and above, whilst maintaining low debt recovery costs.

This ensures that you get the most cost-effective service possible, compared to all others on the market.

Since 2004, we have worked across the globe for business in a variety of sectors, including:

  • Small Businesses
  • Manufacturing and Distribution
  • Law Firms
  • Government Agencies
  • Sports Based Organisations
  • Wholesalers

The number of sectors we have provided our services to demonstrates the calibre of the business debt collection solution we provide.

We can also provide legal guidance on areas such as sending a letter before action, county court judgements etc.

As part of our mission statement, we take pride in ensuring client relationships are not jeopardised by providing professional and clear communication across the board.

If you are experiencing difficult clients who are not paying you on time, it pays to go contact our experts.

Avoiding Late Payment of Commercial Debts | Get Expert Help From Debt Collectors Now

If you need help with a Debt, our friendly team of Debt Collection Experts is happy to help you today,

SPEAK TO A DEBT COLLECTION EXPERT