Business Debt – How to Ensure Debts are Settled
When you’re running a business, it’s vital to do everything that you can to ensure that your customers pay their bills promptly. If you need to take legal action to recover debts, you can use a firm of solicitors providing a debt recovery service. Here are some other tips to help you to ensure that your customers settle their debts on time.
Make sure that your customers know when they must pay their bills.
When you first start to do business with your customers, make sure that they are aware of their responsibilities. The most important way in which to do this is to provide them with a clear set of terms and conditions. These terms and conditions should include details of the length of time within which your customers must pay their bills and the payment methods that they can use. It’s a good idea to involve a solicitor specialising in business law and debt recovery when drawing up these terms and conditions, as ensuring that they are clear and accurate can save you time and expense if you have to use a debt recovery service in the future.
Make sure that you send invoices to your customers promptly and that these invoices are accurate. You should also include details of the date by which payment should be made and the payment methods that can be accepted on your invoices.
Set up a credit control system.
Set up a credit control system, so that you can keep track of the payments which you have received and so that you know which customers have overdue amounts on their accounts. Make sure that you act promptly if customers fail to meet their payment deadlines. In the first instance, you should contact them to inform them that their payment has not been received. This may simply have been an oversight, or they may have a genuine reason why they have been unable to pay on time. In cases such as this, it may be worth allowing them some extra time in which to pay, as this will build your relationship with them. However, whenever you have contact with your customers, make sure that you keep a record of this, in case it needs to be referred to at a later date.
Take action when you don’t get paid.
If you are struggling to get payment from a customer, it’s important to take prompt action and keep following it up. You may want to involve a debt recovery solicitor at this stage. Choose a firm of solicitors that specialises in business law and offers a debt recovery service. Your solicitor will be able to help you to compose correspondence which will make it clear to your customer that legal action will be taken if payment is not received, advise you as to whether you should demand compensation and/or interest in addition to the amount that your customer owes you, and explain how to start court proceedings if you are unable to obtain payment from your customer.