Managing debt more effectively
It has become a common occurrence for business and trade customers to routinely delay paying invoices as a way to ease cash flow.An absence of ready cash hinders the ability to fund a business properly and cash flow is often cited as the number one challenge facing many SMEs.
By taking these simple steps, company directors and business owners can minimise the risk of bad debts and in the process manage their business more effectively.Ensure that terms and conditions are up to date and legally compliant. Binding terms and conditions can be easily enforced.
If you are supplying goods, ensure that your terms and conditions have binding retention of title clauses in them which means that ownership of the goods being supplied does not pass to the buyer, unless all invoices are paid.Carry out regular credit checks and request payments on account where appropriate.
Request payment of invoices as soon as they fall due. Invoices which are more than six months outstanding are far more likely to be unrecoverable and then written off.Take swift debt recovery action in the County Court.
For undisputed debts owed by companies of more than £750, consider serving a statutory demand which is a precursor to insolvency action.Assess whether the debtor has assets such as equipment or stock which could be seized by bailiffs or may own a property against which a court judgment could be secured. Seeking professional advice early on and on a continuing basis e.g. from legal, insolvency or accounting professionals as required. Third party advice can afford a new perspective and options.