Credit Control

[Deleted member 65054]

Good morning all,

I'm 1 half of a 2 person Ltd company - we've been running for 2 1/2 years. So far never had a bad debt.

However we did a job in November for 3K, and so far no payment - I've been told cheques in post etc. I've just sent off a statement by email and will send legal 1st letter tomorrow.

Whilst this is only overdue by 19 days as our terms are 30 days end of month, I've got a bad feeling about this as the company we worked for was only registered last year, and I would like to 'jump' on this one as we can ill afford to write this off.

My thoughts are:
Emailed letter and statement
1st legal letter
2nd recorded legal letter.

But what would be be best next step after that? I could go to site and recover the goods we have installed, but that wouldn't get me paid, and the goods wouldn't be resellable at full price.

Look forward to receiving some advice..

Phil

 

[maxine]

Hi Phil

First off I would suggest a credit check just so you know what kind of risk you are dealing with if you haven't already checked them prior to doing the work.

Aswell as sending letters I would recommend phone, phone, phone, phone, phone, and phone some more along with all the letters.

Good luck

 

[GRDCredit]

Just in case Maxine did not make it clear - PHONE!!!! and if possible visit.

Take care as well about visiting site and removing the stuff you have already installed - nice idea but probably not legal! What does it say in your terms and conditions?

If you would like me to run a credit check on the company feel free to drop me a PM with the company name (confidentially of course)

 

[Deleted member 65054]

Hi,

Many thanks to both of you. I will keep phoning for a day or 2. If no results then - small claims court? Or pass onto a debt collectiopn agency?

Phil

 

[habanero]

Hi,

Many thanks to both of you. I will keep phoning for a day or 2. If no results then - small claims court? Or pass onto a debt collectiopn agency?

Phil

I had a similar problem. After much research we used a Debt collector. However, all they did was send letters threatening court action which I'd already said to the debtor anyway. DC's have no real teeth and take a percentage of the debt anyway so I issued a claim via the governments own moneyclaim website. I had my judgment in 14 days as no defence was filed.

I then spent ages researching bailiffs and went with a High Court Enforcement Officer from The Sheriffs Office.

Basically I had my money within 2 weeks.

It does depend on whether your debtor has assets to seize though. Mine did so paid up straight away.

 

Similar to GRD i am happy to run a credit check on the company for you (i know its probably already been done).

With regards to removing the goods.......like GRD has said, are you legally entitled to do this? Is your Retention of Title worded correctly (you'd be surpised how many peoples aren't).

Once you've credit checked the company you will know what move to take next........a money claim online is easy to do and relatively cheap.

How much is the debt for? Getting judgement is only the first step and does not guarantee you getting your money without creating further expense such as Warrant of Execution etc.....

I am not a fan of debt collection agencies....similar to your previous experience i don't find that they are effective. However, you can't tar each one with the same brush and Steve Thornbury on here comes highly recommended i believe he visits the premises also.

We do collect debts for clients but our tactics are slightly more "agressive" in by we go for the jugular if all other routes fail.

With everything though......you need to make sure you can get your money before you waste any on collection tactics.

If you would like any further advice let me know.

 

[maxine]

Lucy

Debt is for £3k

Op - even if the DCA doesn't have "teeth" they can still be a pest ... which can be effective for early collections

 

[seanstevens]

As this is 'only' 19 days past due I'd say this is still a credit control issue rather than a debt collection issue (depending on the result of the credit check) - Geoff has already offered to do the credit check and it would probably be worth letting him have a crack at it rather than passing off to a debt collector straight away (oh... and we do have teeth, they may be a yellow but they still work)

 

[DaveSUK]

I agree with sean stevens, as it is on 19 days late I think it would be too early to pass the account onto a debt collection agency.

I personally wait until they are at least a month late before I take any action. Iv used quite a few different debt collection agencies in the past some are just useless and simply continue doing what you have been doing yourself such as calling and writing letters.

Now I only use one company http://www.lovetts.co.uk/ they have provden to be very sucessful and have even collected debt I though I would need to write off and they are quite cheap.

 

even if the DCA doesn't have "teeth" they can still be a pest ... which can be effective for early collections

But quite a few offer empty threats.......i.e one letter says if you don't respond within 7 days then we will take further action. 10 days later another letter........you haven't responded, we will take further action. 10 days after that....we are going to take action.

As i said there are god ones out there that will follow up with calls and a visit. They are the ones to use.

 

Debt is for £3k

I started typing and couldn't remember if it was in the post or not

 

[maxine]

But quite a few offer empty threats.......i.e one letter says if you don't respond within 7 days then we will take further action. 10 days later another letter........you haven't responded, we will take further action. 10 days after that....we are going to take action.

As i said there are god ones out there that will follow up with calls and a visit. They are the ones to use.

Agree Lucy, totally pointless on it's own, not even worth the price of the stamp although some "automated credit control processes" would have you think it was the best thing since sliced bread lol

The phone is the best tool for immediate overdues and why people wait for it to become 3, 7, 10, 14, 30 days late before phoning is beyond me. Late means late and whilst that time is going by all the other creditors are likely to be getting ahead in the queue.

If it hasn't been paid on time straight away then there is a reason for that

* Waiting to be asked as a standard policy. Some companies have invoices signed off waiting to be paid but just wait until they are asked/chased.

* Disorganised (have it somewhere but just haven't got it signed off, paid, sent in the post whatever)

* Unsatisfied (not happy with the service or product and want to raise this somehow or deduct from invoice before they pay. Perhaps the supplier took to long with their work or billing so they think it is "fair" to make them wait for their payment.

* Buying time (waiting for some cash to come in before their next "payment run" or juggling overdraft or other priorities but it will get paid albeit late)

* Up sh1t creek (desperately waiting for some magic fairy dust solution that will mean that some creditors will get paid or they will fold)

PS - This is not a proper extract or quote from Credit Managers handbook of can't pays and won't pays lol just my own little made up categories and each one is just crying out for a phone call before moving on to the next step in the process (debt claim)

 

[GRDCredit]

Agree Lucy, totally pointless on it's own, not even worth the price of the stamp although some "automated credit control processes" would have you think it was the best thing since sliced bread lol

Naughty naughty!

 

[Peter Bowen]

I run one of those 'automatic credit control systems'. The one that gets our users paid a couple of million every month.

Think of automatic credit control as one of the tools in your credit control toolbox.

It's a very cost effective way of doing it's part of the credit control job.

What we've built is the small business version of the same types of systems used by banks, phone companies and electricity suppliers.

We have users who manage (and get paid) several hundred invoices each month - there is no way that they could do so manually at a similar price.

We have other users who have very expensive time - the professionals and some tradesmen - every hour they spend phoning after invoices is an hour that they can't bill.

But, there are some invoices and customers that require a different tool - a phone call, a personal visit, a lawyers letter or a baseball bat .

Nobody should be married to one method of doing business. Pick the right tool for the job.

 

[Big Pete]

Good morning all,

I'm 1 half of a 2 person Ltd company - we've been running for 2 1/2 years. So far never had a bad debt.

However we did a job in November for 3K, and so far no payment - I've been told cheques in post etc. I've just sent off a statement by email and will send legal 1st letter tomorrow.

Whilst this is only overdue by 19 days as our terms are 30 days end of month, I've got a bad feeling about this as the company we worked for was only registered last year, and I would like to 'jump' on this one as we can ill afford to write this off.

My thoughts are:
Emailed letter and statement
1st legal letter
2nd recorded legal letter.

But what would be be best next step after that? I could go to site and recover the goods we have installed, but that wouldn't get me paid, and the goods wouldn't be resellable at full price.

Look forward to receiving some advice..

Phil

Bit harsh ..its only November invoice , they probably only entered the thing in December and had xmas and all the snow etc ..

If they havent paid end of month then worry ,but not yet

 

Visit!!!

I always say it; no need to be confrontational or aggressive; just turn up, look them in the eye and ask what the problem is..

 

[termsandconditions]

I agree with Lucy & GRD Credit in that if you hoping to reclaim goods then your Retention of Title clauses in your terms and conditions will have to be pretty robust.

The Title clauses should work both in a legal sense and in a practical sense. By which I mean that legally, it has to be strong enough for a liquidator or receiver to let you reclaim your goods. And practically, prior to any liquidation scenario, it has to work so that you are not prosecuted for trespass and yet not too onerous that your clients object to signing them in the first place.

But if your terms and conditions are fighting fit, then you can achieve a lot in the recovery of your outstanding invoice or goods without having to resort to expensive legal action, albeit wonderfully successful in Habanero's case.

Do keep us posted in how you get on with this matter.

Best Regards

 

[Geoff T]

... "automated credit control processes"...

I run one of those 'automatic credit control systems'...

Knew that was going to get you into trouble Max! Did I miss the "round robin" email saying it was "bait Peter" time?:|

Just to stay neutral - good points from all!

OP - I would also appreciate your letting us know how you get on...

 

[Deleted member 65054]

Hi all,

Just thought I'd let you know I've been paid for my 2 outstanding debts, total 11K!

I decided not to use credit collectors or go down the legal route, but just kept hassling and chasing every day - particularly as I was still getting communication (even though both companies weren't answering calls - I commmunicated with one by text message, the other by email).

I still consider myself lucky to get paid though, and it was a 'near miss' imo. I will credit check and if necessary get a deposit next time I take on a new customer.

Thanks to everyone on here for their help and advice.

Phil

 

[maxine]

Well done Phil

Just another little tip if people are not answering calls is to with hold your number by dialling 141 before their number. That way if they have CLI and don't want to talk to you but don't mind talking to everyone else then they will answer. Or, call from someone elses phone or mobile.

11k was a bit of a near miss then but glad you got it in the end

 

[Deleted member 65054]

Maxine

Yep that's right - I turned off 'own number sending' and the phone got picked up straight away.

I also posted them a registered letter, and just hassled, hassled, hassled them - I think they knew I wasn't going to go away. Also wheeled out the 'small business' card - 'I'm a small business, can't afford this level of debt' - basically tried everything I could think of.

Still get steamed up thinking about it now!

Phil

 

[Peter Bowen]

Great news. 11k is big enough to be rather pleased about it.

 

[termsandconditions]

Dear Phil

Well Done!

Pester power works! Your debtors must have been juggling several invoices and you managed to get yours treated with priority over others who were not chasing as hard as you.

Best Regards