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

Eden Project Garden at RHS Chelsea Flower Show 2026 marks 25th anniversary Eden Project garden

Eden Project Garden at RHS Chelsea Flower Show 2026 marks 25th anniversary

21 Oct 2025

2

Breck Homes appoints new managing director Phil Dolan, Breck

Breck Homes appoints new managing director

20 Oct 2025

3

Management buyout at Suresite Group Steve Holden

Management buyout at Suresite Group

17 Oct 2025

4

Meet the influencers who have generated £2m sales for one company Helen and Richard Chalu new

Meet the influencers who have generated £2m sales for one company

16 Oct 2025

5

WHN strengthens position in prestigious legal guide Daniel Long

WHN strengthens position in prestigious legal guide

16 Oct 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
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

Help to grow management course
Help to grow - barriers to growth.png.png
LBV Hub Seminars
26 Sep 2025 - 16 Dec 2025

Help to grow management course

Preston Campus , Preston , PR1 2HE

09:00 - 15:00

HR Essentials for pubs, bars and licensed venues
EventBrite NORi - 22nd Oct Webinar.png.png
LBV Hub Webinar
22 Oct 2025 - 22 Oct 2025

HR Essentials for pubs, bars and licensed venues

Online - Teams, Leyland, PR253XH

13:30 - 15:00

RISE - Lancashire's unique leadership programme for women
thumbnail_Emma Weston Illustration WENDY BOWERS RISE Illustrstion.jpg.jpg
LBV Hub Seminars
22 Oct 2025 - 18 Mar 2026

RISE - Lancashire's unique leadership programme for women

East Lancashire Chamber of Commerce, Clayton le Moors, BB5 5JR

09:30 - 15:30

Women scaling up Blackpool Fylde and Wyre
LBV Hub Seminars
22 Oct 2025 - 09 Jan 2026

Women scaling up Blackpool Fylde and Wyre

The Small Business Academy, Blackpool, FY4 5JX

09:30 - 15:30

Chamber Business Lunch – October
LBV Hub Networking
24 Oct 2025 - 24 Sep 2025

Chamber Business Lunch – October

Lancaster Golf Club, Lancaster, LA2 0AJ

11:00 - 13:30

North West Business Expo 2025
https---cdn.evbuc.com-images-880456273-4862066883-1-original.20241022-105445.jpeg.jpg
LBV Hub Exhibitions
24 Oct 2025 - 24 Oct 2025

North West Business Expo 2025

Bolton Stadium Hotel, Bolton, BL6 6SF

09:00 - 15:00

Lancaster District Business Support Expo
Lancs-cham-logo.jpg.jpg
LBV Hub Networking
29 Oct 2025 - 29 Oct 2025

Lancaster District Business Support Expo

The Platform, Morecambe, LA4 4DB

10:00 - 15:00

Chamber Breakfast Networking – November
Lancs-cham-logo.jpg.jpg
LBV Hub Networking
06 Nov 2025 - 06 Nov 2025

Chamber Breakfast Networking – November

Porsche Centre South Lakes, Carnforth, LA6 1FW

08:30 - 10:30

Lancashire Police business update with The Police and Crime Commissioner
Lancs-cham-logo.jpg.jpg
LBV Hub Roundtables
10 Nov 2025 - 10 Nov 2025

Lancashire Police business update with The Police and Crime Commissioner

Lancaster Castle, Lancaster, LA1 1YN

14:00 - 16:00

AI, Creativity, and what it means to be human
2.jpg.jpg
LBV Hub Networking
11 Nov 2025 - 11 Nov 2025

AI, Creativity, and what it means to be human

Society1, Coworking Space, Preston, PR1 3LT

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 LBV124 Online Graphic
Subscribe now

Weekly news bulletin