How to maximise your return on unpaid invoices

By Lancashire Business View

06 Dec 2016

According to Zurich’s latest SME Risk Index, over half of Britain’s SMEs have problems with late payment, with £225bn in unpaid invoices.

By Tom Smith, partner and head of dispute resolution, Forbes.

These figures highlight the common problem of late payment. Unpaid invoices can have severe consequences for your business.

Our approach at Forbes Collect is to help you be proactive in preventing bad debts accruing and minimise the disruption (and maximise the return) when they do.

There are four ways this can be achieved:

1 Have a clear credit control procedure

Smaller and rapidly growing businesses tend to prioritise sales and extend payment terms in order to win further work. Alternatively, the processes for effective credit control may not yet be in place, meaning that debts are allowed to accrue.

Ensure you have effective and automated credit control procedures in place so the customers know they are not going to be allowed to use you as a source of cheap (or free!) finance.

Some of our clients also use Forbes Collect as an extension of their credit control. This can help to maintain business relationships by de-personalising the process and also encourages earlier payment.

2 Know your customer

This seems simple however it is crucial to maximising your return on invoices.

a) What type of legal entity is your customer? This could be an individual, sole trader, partnership or limited company. Both the contract and invoices should be addressed correctly to speed up collection.

b) Conduct a risk assessment of your potential customer at the outset by completing a credit application form and conducting a credit check.

c) For added security look to get personal guarantees from the directors of trading partners.

d) Keep up to date customer records.

3 Clear terms and conditions

It is essential that you have clear terms and conditions of business covering aspects including payment terms that are incorporated into your agreements. Ideally, there should be a signed order form or contract at the commencement of any dealings.

Clear terms of business and documentation reduce the chance of uncertainty and therefore maximise the chances of being paid on time.

4 Add interest and late payment compensation to your debt

Interest at 8.25% and compensation between £40-100 can be charged on each unpaid invoice. You are legally entitled to recover these sums if a business customer is late paying. These are automatically added to the debt during the Forbes Collect recovery process, thus maximising your returns. In summary, there are a number of steps that you can take to prevent debt from accruing, from ensuring tight credit control to getting to know your client or customer. However, if you are having difficulties in recovering monies we at Forbes Collect will help you maximise your return.

Latest news

1

VARS Technology team up with debt resolution specialists to fight fuel theft David Nichol John Garnett Aydan Jones and Laura Tilley

VARS Technology team up with debt resolution specialists to fight fuel theft

12 Sep 2025

2

University of Lancashire unveils Preston campus installation to celebrate name change University of Lancashire new feature

University of Lancashire unveils Preston campus installation to celebrate name change

12 Sep 2025

3

PM+M welcomes ten new apprentices for 2025 intake Lucy Field, Kate Walsh, Ellie Fisher, Zainab Aswat, Reece Jones, Aisha Bibi Patel, Finley Vila, Uzair Zariwala, Richard Prest, and Charlie Harrison

PM+M welcomes ten new apprentices for 2025 intake

11 Sep 2025

4

ROCCIA strengthens commercial division with senior appointment Andrew Grove

ROCCIA strengthens commercial division with senior appointment

11 Sep 2025

5

Final call for investors: Rossendale community solar project must hit target by November Gary McEwan managing director of Interfloor

Final call for investors: Rossendale community solar project must hit target by November

10 Sep 2025

Background image for hub sign up block

LBV Hub

Leverage Lancashire Business View platforms

Post your news
Post your events
Post your offers
Build your network
Improve your SEO
Gain coverage in the magazine
Sign-up
Events
Sub36 Networking - Follow the signs
Sub36 Deaf Village Social1200
Networking
17 Sep 2025

Sub36 Networking - Follow the signs

The Deaf Village, Blackburn, BB2 5EN

10:00 - 12:00

LBV124 September/October Launch Event
MBP Arc Cinema Preston Opening 205
Networking
18 Sep 2025

LBV124 September/October Launch Event

The Arc Cinema, Preston, PR1 2BL

08:30 - 10:30

CMI Level 5 Management and Leadership Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Management and Leadership Course

Preston Campus, Preston , PR1 2HE

09:00 - 17:00

CMI Level 5 Project Management Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Project Management Course

Preston Campus, Preston, PR1 2HE

08:00 - 17:00

Longridge Soap Box Derby
Screenshot 2025-06-10 090035.png.png
LBV Hub Fundraisers
14 Sep 2025 - 14 Sep 2025

Longridge Soap Box Derby

Berry Lane, Longridge, PR3 3WH

10:00 - 16:30

Preston Tech Connection - The Ultimate Tech Quiz!
Preston Tech Connection Sept 25.png.png
LBV Hub Networking
16 Sep 2025 - 16 Sep 2025

Preston Tech Connection - The Ultimate Tech Quiz!

Society1, Coworking Space, Preston, PR1 3LT

18:00 - 19:00

The Business Network Central & East Lancashire
LBV Hub Networking
17 Sep 2025 - 17 Sep 2025

The Business Network Central & East Lancashire

Stanley House, Blackburn, BB2 7NP

11:30 - 14:15

Cumbria Business Expo 2025
https---cdn.evbuc.com-images-880461633-4862066883-1-original.20241022-110415.jpeg.jpg
LBV Hub Exhibitions
19 Sep 2025 - 19 Sep 2025

Cumbria Business Expo 2025

Carlisle Racecourse, Carlisle, CA2 4TS

09:00 - 15:00

Preston Freelancer Meet-Up: September
Sept Freelancer (1).png.png
LBV Hub Networking
23 Sep 2025 - 23 Sep 2025

Preston Freelancer Meet-Up: September

Society1, Coworking Space, Preston, PR1 3LT

10:00 - 11:30

Your Business, Your Region: Making sense of devolution and Local Government Reorganisation
Chorley Council breakfast event new
LBV Hub Networking
23 Sep 2025 - 23 Sep 2025

Your Business, Your Region: Making sense of devolution and Local Government Reorganisation

Worden Hall, Leyland, PR25 3DH

08:00 - 11:00

Speed Networking with BNI
2.png.png
LBV Hub Networking
24 Sep 2025 - 24 Sep 2025

Speed Networking with BNI

Chorley Football Club, Chorley, PR7 3DU

16:00 - 19:00

The Marketing Meetup IRL: Lancashire - September
TMM Lancashire
LBV Hub Networking
25 Sep 2025 - 25 Sep 2025

The Marketing Meetup IRL: Lancashire - September

Chorley, PR7 2SL

18:00 - 20:00

Advertise with us

Reaching 50,000 members, our print, digital and event platforms offer a fantastic way to raise your business profile and help you grow.

Find out more LBV 123 Online Graphic
Subscribe now

Weekly news bulletin