Rubber Cheques

[AV Connections]

I completed a job for a small business client and the total came to £157.00

They were quite slow to pay, almost 2 months. When I enquired I was told the accountant was on holiday and was returning Monday (I enquired on a Friday) and to expect a cheque that week.

A cheque arrived a week after this "expected" week which I have now paid in.

Checking my online business banking it looks as if this cheque has bounced.

What is the usual, accepted practice of adding interest and fee's to the invoice for such bother and hassle?

Kindest regards,

Chris Jackway

 

[websnail]

Don't mess about... File a small claims action against the client at county court and send them the papers.

You could choose to send them a copy of the completed forms ready for submission if you wanted to give them a chance to pay up first but just don't bother trying to be reasonable.

Oh and you include the charge for a small claims filing in your claim...


I went nearly 7 months waiting for a client to pay me when I was wet behind the ears and wished I'd done it the way above from the start.

Best of luck.

 

[Whites Electrical]

Yeah same advice small claims action is the best way.

 

[Morgy]

Hold onto the rubber cheque as that could be proof they owe you the money in case they get funny.

As they were slow to pay why not keep presenting the cheque, off course this will be dependent on what fees you have to pay.

 

[Maslins]

As suggested above, make sure you keep hold of the cheque, as that is their admittance that they owe you the money (ie they can't later say your invoice wasn't valid for whatever reason).

I would probably avoid going down the small claims court route just yet, but I'd certainly let them know that it's your next course of action...see how they respond.

I know small claims courts don't cost much but bear in mind if the company did go bust (or individual declare bankruptcy if sole trader) you won't get your money back regardless of whether it's technically due or not, so do a bit of research into the financial situation of the business before you go spending money chasing it.

 

[MyAccountantOnline]

Hi Chris

Your biggest mistake was allowing this debt to remain unpaid for so long.

This will give you some really good advice on what you can do -

http://www.businesslink.gov.uk/bdotg/action/layer?topicId=1074453392

You do need to be much firmer when chasing debts - do it much quicker and dont be taken in by such excuses as the ''accountant isnt here'' - I doubt very much that the accountant is the only cheque signatory, if they are at all.

In future you need to have a strict credit policy in place - have terms of payment in place before you do any work and make it clear this is how you work. Particulary at the moment - ''he who shouts loudest gets paid quickest''.

 

[credit control service]

Hi Nicola

We can chase up the debt on your behalf. No-win no-fee and nothing to pay. We make our revenue by charging your debtor the late payment fee and interest. Find us on the web or PM me if you're interested.

Alternatively you could begin a legal claim process straight away using moneyclaim online which will cost you approx £40 so is cheaper than using a solicitor. The problem with this is that the process can take a long time if it goes all the way to CCJ and bailiff, plus you pay to send the bailiff out and theres still no guarantee he's able to get your cash. So better to try a debt collection company first.

Hope this helps.

Jeremy
TAK-Credit Management
Credit Control and Debt Recovery

 

[Steve Thornbury]

I really wouldn't go straight to court, especially for that amount. Its gonna cost you that amount to MAYBE get that back.
Talk to someone like Nicola above or myself, or in fact any person in this industry about how we can help.

 

[MyAccountantOnline]

Hi Nicola

We can chase up the debt on your behalf.

Jeremy

I think you mean 'Hi Chris'

 

[credit control service]

I did Nicola, yes.... and I agree with Steve, you're better off using a professional debt recovery firm to get a letter out and make calls on your behalf.

You need to show this debtor that you're very serious about collecting your money and using a 3rd party is a good way of doing this.

 

[websnail]

I did Nicola, yes.... and I agree with Steve, you're better off using a professional debt recovery firm to get a letter out and make calls on your behalf.

You need to show this debtor that you're very serious about collecting your money and using a 3rd party is a good way of doing this.

Erm... I got a PM too... you might want to check you're actually sending information to the right person/people before you get accused or spamming all and sundry.

As to a professional debt collection firm. I'd agree if the amount was more significant but we're talking less than £200 here. I'd take a debt recovery firm to mean things had escalated well beyond a small problem which is what it appears to be now. Just my opinion but that option seems to be a bit like using a sledgehammer to crack an egg.

 

[credit control service]

Sorry websnail - pm'd you by mistake instead of AVC. 2 month late payment and a bounced cheque is usually a bad sign. The business may be in trouble and may have a number of creditors chasing them... and those that chase correctly are more likely to get paid. Debt Recovery if done correctly is an escalating process which should retain the customer relationship if possible.

£157 may seem like a small amount but how much would you need to sell to make £157 profit? At 5% margin that's a £3000 deal.

For our regular customers we chase some debts of £50 and less. It doesn't have to cost the supplier anything at all as the debtor should pay late payment fees and interest.

AVC - to see late interest and fees you can apply check our website useful tools or there's also a good website called getitpaid which explains also explains the Late Payment Act. Essenitaly you can charge your debtor £40 late payment fee plus interest which is currently 10% per annum.