Every business knows that cash is king. The best way to monitor cash flow is with effective credit control.
To ensure you get paid for your services and reduce debtor days you must take a positive approach to credit control and minimise the risks of debts becoming overdue. Establish a procedure for credit control, in accordance with your T&Cs and follow it.
The limitation period for collection of debts is 6 years from the date the debt became payable and after that time they may become statute barred. This means that the debt is no longer recoverable, including by legal action in the courts. Whilst the debt might not be recoverable through the Court, we can still send the debtor a letter to try to collect these amounts owed to you on your behalf.
When a supplier agrees to sell to a customer then he or she is entering into a contract which has legal consequences.
Debtor days is a term used when looking at how quickly you collect payments from those who owe you money. The more days it takes for payment, the higher the debtor days.
As everyone is aware, the increased cost of living is having an impact on everyone – individuals and businesses. So what should you do when you have bad debt? The cost of living increase is impacting businesses getting paid on time but should this result in debts being ignored?
Making sure you are invoicing your customers correctly, plays an important part should the relationship take a turn for the worse, and you find yourselves embroiled in a County Court claim or litigation. Of course, nobody takes on new customers envisaging that the relationship will turn sour, but we have seen cases where clients have invoiced their debtor incorrectly (the invoice addressed to them as an individual, not as a limited company for example). A simple mistake, but this resulted in further costs and time being incurred to amend the claim, costs that were not recoverable!
There is nothing more frustrating for those running an enterprise than winning the business, delivering the work and then failing to get paid for it. Those who are late in paying and those who refuse to pay cause so much frustration and worry for businesses. But with the help of a specialist, businesses can start to tackle these problems and turn around a negative situation to something that it is much more positive.
There is nothing more frustrating for those running an enterprise than winning the business, delivering the work and then failing to get paid for it. Those who are late in paying and those who refuse to pay cause so much frustration and worry for businesses. But with the help of a specialist, businesses can start to tackle these problems and turn around a negative situation to something that it is much more positive.
A recent change in the law, spotted by one of our Wills and Probate Solicitors in Today’s Wills and Probate, has outlined new compliance standards for those in the Funeral Plans sector. The move, which will see new regimes set in place by the Financial Conduct Authority, will change the way funeral planners market themselves, set out plans with customers and outlaw the use of commission.
In our latest article on debtors and how to deal with them, Else Solicitors’ Laura Charles looks into the importance of communication in the legal process.
Director guarantees/personal guarantees
When you supply a limited company, do you ask one or all of the directors to sign a personal guarantee?
If you have a signed Personal Guarantee, then you can pursue the director personally. This will only really get you your money back if the director themselves have cash or assets so we would always advise ensuring you do your due diligence and familiarise yourself with the financial status of any director you wish to engage in this way.