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Debt Recovery - Tips for Small Businesses
When trading times are difficult, it is more important than ever for businesses to manage their cashflow carefully and ensure that they collect money owed to them on time.
Here are three quick tips to help your credit control:
1. Know your customer: it is essential to know the full name of your customer. Is it a limited company? A partnership? A sole trader? Once you know who the customer is, you can work out if you want to do business with them, and it makes it a lot easier if things go wrong, deciding who to issue a claim against. So many businesses are unsure at the time of issuing proceedings exactly who their customer is.
2. Think about your exposure: on every job you do, you will have a broad idea of the costs to you of doing the work and your profit margin on that work. If things went wrong, and you were not paid, how much would you be "out of pocket"? Should you be asking for a payment up front for the materials you will be using on a job or in some cases, the entire work? It is difficult to avoid bad debts completely, but what you can do is limit the damage to your business by trying to make sure that at the very least you cover your costs if something does go wrong.
3. Have a system for collecting your debts: You need to decide what your payment terms are (and remember they do not need to be the same for everybody}. Bradshaw Hollingsworth suggest that you have a system in place to chase invoices, and stick to it! Once the customer has exhausted the steps in your system, do not delay and think about court action to recover your debt.
If things do go wrong, we can send letters of demand to your customers, issue proceedings for you and attempt to enforce the Judgment if the debtor does not pay voluntarily.
"Debt Recovery and good credit control is all about systems and planning. We can help you."
In many cases, we can add interest and costs to the claims against your customers so as to limit the costs to you for collecting your money.
If you would like more details about our Debt Recovery services and advice, including advice on credit control, please contact Greg Hollingsworth at Bradshaw Hollingsworth Solicitors on mail@bhlaw.co.uk
Bradshaw Hollingsworth provide specialist legal advice in the areas of Employment Law, Litigation, Commercial, Insolvency, Debt Recovery, Wills & Probate and Property, including residential conveyancing, house sales, house purchases and re-mortgages. For more information about our services please contact Greg Hollingsworth of Bradshaw Hollingsworth Solicitors, 19 New Walk, Leicester on 0116 204 2500 or by email at greg.hollingsworth@bhlaw.co.uk.
Partners: Robin Bradshaw and Greg Hollingsworth - Bradshaw Hollingsworth is regulated by the Solicitors Regulation Authority.
