Avoiding Bad Debts & Maximising Credit Control

Year Published: 2020

The current climate will inevitably result in a large number of unpaid invoices. In order to avoid this and maximise credit control, it is important to strengthen your position from the outset. Jodie Sumner, Debt Recovery Executive, provides her expert guidance on avoiding bad debts.

Considerations for Unpaid Invoices

When unpaid invoices are referred for debt recovery assistance, we might ask the following:

  • What is the basis of your retainer/agreement with the recipient of your invoices, and can you evidence this?
  • Have you provided or drawn attention to your Terms & Conditions, and have these been accepted or implied to be accepted?
  • Are your invoices subject to written or verbal quotations that have been accepted? If so, has this charging basis been evidenced and referred to on your invoice?
  • Have your invoices been correctly addressed to the accurate entity?
  • Are your payment terms clear? If not, there may be some confusion as to when payment is due to be made.

Protecting Your Position While Avoiding Disputes

What can you do to protect your position and reduce the need for matters to get contentious?

  1. Ask for payment in advance of your provision of work, time, goods, services etc.
  2. Ensure that your invoices are properly addressed to the correct entity. If they are not, this could result in issues later down the line or us possibly recommending that your invoices are amended and re-issued.
  3. ALWAYS clarify the basis of your contractual relationship from the very beginning, i.e. who is doing/supplying/delivering what, how much will it cost, how long will it take, when will payment be made?
  4. Ensure that your Terms & Conditions are up to date and specifically refer to late payment consequences. If they are not, you may not be entitled to claim late payment interest and compensation.
  5. Exhaust your internal credit control procedures so that there is a documented chain of your efforts.
  6. Rely on your Terms & Conditions and ensure that the payment terms are clearly set out on your invoices. Also, highlight the penalties for late payment.
  7. Persist – Calling the recipient of your invoices can be much more effective than an email that could be easily misinterpreted, ignored, deleted or not delivered.

Following the above points can save you time – not to mention costs – in the future should your invoices become disputed, or necessary to be referred for debt recovery assistance.

SAS Daniels LLP offer fixed fee debt recovery services that are fully compliant with the Court’s relevant protocols.  Details of our transparent and cost-effective services can be seen on our Fixed Price Debt Recovery page.

For further information about avoiding bad debts or to enquire about our Debt Recovery services, please contact Jodie Sumner on 0161 475 7606 or email [email protected].

Our commercial team are also on hand to review and/or create your terms & conditions to make sure that you remain fully protected in accordance with up to date legislation.  Please contact Kaye Whitby on 0344 391 5830 or email [email protected] for more details.

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Disclaimer: Our insight & opinion content provides general information and although we endeavor to ensure that the content is accurate and up-to-date, no representation or warranty, express or implied, is made as to its accuracy or completeness and therefore the information should not be relied upon. The content should not be construed as legal or other professional advice and SAS Daniels LLP disclaims liability for any loss, howsoever caused, arising directly or indirectly from reliance on the information on this website. Please seek appropriate legal advice from one of our suitably qualified lawyers if you require assistance.