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Is legal action the best way forward?

No matter how many checks you undertake on customers, there will always be one who’s a poor payer.

They will come out with a number of excuses;

“We have not received the invoice?”

“We have lost the invoice, can you resend it?”

“I know I didn’t mention this before, but there was a problem with the job / invoice?”

“The person who authorises payments is away for 6 months, can it wait?”

This type of customer is always going to be frustrating and can cause you to jump the gun and instruct Solicitors to take them to Court to force payment. But, is this the best way?

There are a lot of good Solicitors out there but there are also a number who will charge a fee to send a standard letter which may not produce results. This can delay matters further, causing frustrations and potential cashflow issues. If a Solicitors letter is unsuccessful, do you try to wind up the company? It can cost a company upwards of £2,600 so this can often not be a viable option.

Cowgills Creditor Protection recommends trying the following actions first;

Undertake a financial background check

Review the company accounts at Companies House which will show the balance sheet and reported asset values as at a specific date. This will indicate whether the company has any assets to protect which could cause them to react if threatened with legal action.

Website and Social Media Checks

Have a look at their website and any social media accounts to see if you can ascertain what assets the company may hold.

Compromise

If the company has no reasonable assets, then progressing down the legal route can be a cost incurred which cannot be recovered. It may therefore be more economical to come to an informal repayment agreement to attempt to make payment easier for the customer.  Whilst you may not be happy to do this it may be the best option available to have your liability repaid in full or at the very least, have it reduced.

Cowgills Creditor Protection

Another reason for non-payment is potentially because they are insolvent. If this happens to your client, forward the documentation to Cowgills Creditor Protection and we will undertake a review on your behalf, free of charge. We will also complete and review any claim and proof of debt form and submit this to the Insolvency Practitioner on your behalf.

Disclaimer

The information was correct at time of publishing but may now be out of date.

Business Recovery
Posted by Cowgills
28th August, 2019
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