Here are some of our top tips:
Know who you are contracting with
Make sure you know you are contracting with. Is it a limited company, a partnership or an individual trading as a business entity (a "sole trader")? Does the company number and company name provided to you match the information on Companies House? If a partnership or sole trader, do you have the full names of the individuals behind the entity? Do you have their home addresses (to help recover if they cease to trade)?
Ensuring that you have the correct name and address of your customer and that the contract documentation and invoices are sent to the correct party and the right address can save problems arising if you are subsequently forced to sue for payment.
Confirm your terms and conditions
If you have standard terms and conditions, make sure these are sent to your customer at the time you are making the contract and try to get confirmation that they have been received. If you issue terms and conditions after the contract has been formed, they have no legal effect and will not form part of the contract.
Make clear your payment terms in the contract
When do you expect to get paid? What are the implications for your customer if they do not pay you on time? Will you charge interest at a particular rate over base for example?
Do not assume
Do not assume that you are automatically entitled to charge interest and compensation under late payment legislation. If you state that interest applies at a particular rate in your contract that is the rate you must apply. If you wish to rely on the late payment legislation, it may not apply to certain "consumer contracts" however.
Adopt a carrot approach
To encourage prompt payment of your invoices, think about adopting a “carrot” approach. So for example, your contract might state you expect payment in 30 days but that you will apply a discount if you are paid within 7 days.
If you get all of these things right from the start, it will be much more difficult for a debtor to refuse to pay on the basis that your contract terms are not clear. Spending a bit of time getting it right at the beginning can often save time and money in the long run.
What we can do for you
We can offer fixed fee packages for demand letters, court actions, and debt enforcement. We can provide individualised assistance on your credit control procedures, to include ledger review, training, review of your contractual documentation and procedures, and redesign of your processes.
If you would like more advice on debt recovery you can contact our award winning and results driven team.