Three easy steps to ensuring your clients pay on time:
1. State your terms before you provide the goods or services
This may seem obvious but many businesses do not actually tell their customers when they want to be paid! I had a client call me up for help because she was owed money by a customer who was refusing to pay. When I asked her to send me a copy of her Terms of Business, turns out that she didn’t have any. She had sent out beautifully coloured proposals setting out her services and the price but no actual statement of when it was payable or what would happen if they were late paying.
2. Check your invoices- do they clearly set out:
- Payment terms e.g. ” Payable within 14 days from date of invoice”
- Account details
- Interest chargeable if client is late paying
3. If all else fails, sue!
If the amount you are owed is less than £100,000 and you have done everything possible to get it back, you can actually take the client to court yourself online without involving a lawyer. There is a new Money Claim Online service, offered by HM Courts & Tribunal Service which allows you to create the claim online and once complete, the court will do the rest. It costs from as little as £25 for claims up to £300. If the customer does not pay or defend the case, you get judgment against the customer and can then enforce it. Most customers do not want it to get to that stage or have judgment against their name as it will affect their credit ratings if they want to borrow money not to mention the overall black mark it creates on all sorts of records.
If you need help with drafting your Terms of Business or would prefer us to handle the claims process, contact us now.