Can’t pay or won’t pay?!

By Diane Bantten - Acquit Debt Recovery

We all know that the economy isn’t in a happy place at the moment, we all know about the double dip recession and we all know that times are generally hard. It is hard to win new work and therefore when we do, we really want to hang on to that client ........ don’t we?

What about the client that starts off brilliantly, offers you new work frequently, pays on time and gives you repeat work – ideal! However, it seems to be more and more prevalent that that ideal client is starting to pay later and later, your credit control procedures may say chase after 30 days – how many of you are still waiting for payment after 90? Do you carry on working for them or do you put them on stop OR are you so frightened of upsetting them that you do nothing? To my mind, a client that doesn’t want to pay for your service or is unable to isn’t an ideal client at all!

Let us presume that you have your terms and conditions in place. One of your terms maybe payment should be received within 14 days. If your invoice hasn’t been when due, why don’t you make it part of your credit control procedure that you call them? People really don’t like talking about money and it’s even worse when they know that they owe you money! At this stage if you are offered an excuse it is more than likely you have a “can’t pay” on your hands. Diarise the matter, call them back in a couple of days and if payment still hasn’t been received consider offering an installment plan. If however, they offer you a complaint, and that complaint is without foundation, then in my experience its more than likely that you have a “won’t pay” on your hands.

You’ve established that they won’t pay – what next? If you have the time and resource to deal with it yourself you need to (i) calculate interest owed (ii) add late payment compensation and (iii) make a formal demand for payment.

In my experience it pays to seek professional advice at the point of non payment. Your customer will often sit up and pay attention when they are contacted by a third party seeking payment on your behalf. A third party can assist you in maintaining a good relationship with your client who should understand that in these tough times cash is king and we all deserve to be paid on time!

Top tips!

(1) Ensure your terms of business are notified to your client at the very beginning of your relationship

(2) Do your homework – when supplying new customers obtain a credit report.

(3) Review your current credit control procedures – include your bank details on your invoices and ask for electronic payment it will boost your cash flow.

(4) Enforce your terms of business, if you are due payment on day 15 ensure that you pick up the telephone and ask for payment, follow that with a formal letter of demand

(5) Don’t allow your client to fob you off – be firm.

(6) Ask us to look at your late payment clause .... we may be able to enhance it and remember, if you decide to instruct us in most cases we can get the debtor to pay your costs!

Acquit Debt Recovery are debt recovery experts based in Dorset.

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For a friendly chat and guidance, call Acquit Debt Recovery today on: 01202 432022, or email This e-mail address is being protected from spambots. You need JavaScript enabled to view it .


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