How Do I Recover Money Owed To Me By Another Business?
Mar 3, 2015
Running a business means that you have many responsibilities to deal with to ensure that you are successful. You must find customers or clients, sell products or services and get paid for offering these services.
The latter can be where you experience problems and having acted in good faith by providing goods or services to another business or individual, your invoice remains outstanding. It can be extremely frustrating and time-consuming to try to get the money you are owed, but you can take action.
Firstly, making sure that your credit control processes are as tight as they can be is a good place to start. It won’t help you recover the current debt, but will ensure that you are as protected as possible from this happening again. Check your supplier agreements for payment terms and ensure these are stated on your invoice. Invoice promptly after the goods or services have been given to keep your cash flow moving in the right direction, and if an invoice is outstanding, pick up the phone and chase it up.
Sometimes though, no amount of chasing will result in the payment of an invoice and at that stage, you will need to make a decision about whether you write off the debt, or if it is for a substantial amount of money, whether to instruct a solicitor to recover the debt for you.
Just the threat of legal action may make an owing party pay up, so it is worth considering this as a first step. In addition, a credit check could be carried out on the business or individual to see if there are any reasons why your invoice has not been paid.
It is important to recognise though that if they are not paying your invoice, there may be reasons for this such as financial difficulties in the business.
Where this is the case, you do still have options to recover the money owed, such as a winding-up order, which effectively can close down a company for not paying a debt worth more than £750.
It is important to weigh up the cost of litigation to get back the sum of money owed against the actual value of the debt so you can be sure it is worth taking action. As mentioned previously having a strict debt recovery procedure is essential.
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