Payments are Late Every Time
If a customer always pays late, it’s hard to know whether this is a sign that they’re in financial difficulty or whether it’s just a cynical financial policy to ’sweat the balance sheet’. In either case, it’s still good practice to strive to get the company to pay on time. The longer your invoices are beyond terms the more chance you have of being caught by a bad debt.
??????????? ???????????
Escalating an Invoice
Businesses with cashflow issues tend to pay only those invoices they feel they have to. Materials and services that they absolutely need to keep your business going come first, then PAYE and payroll. Then whatever is left is used to pay off only those invoices that look most urgent. How do you get your invoice to the top of the pile?
?
If any of these warning signs apply to an invoice you have outstanding with a customer, it would be well worth considering involving a professional debt recovery agency such as AVC Debt Recovery to bring it in quickly.
?
If a debt can be recovered we can receiver any business debt over ￡600.00 and unlike other we offer no win no fee as standard and no up-front fees or charges. For overdue invoices, you can even add late payment interest and our fees to the debt under the law, so there is a ?chance we can recover 100% of your monies..
?
“I’m Waiting for a Customer to Pay Me”
?
This is a very common excuse, especially when you supply products or service that the customer then invoices someone else for. In their mind, they can’t pay you until their own customer has paid them. But if this really is the case then it is a significant warning sign that they are financially stretched, perhaps because they have taken a too-large contract or have general cash flow issues. The law is clear. You have no flow down liability for their cash flow issues.
?
“I can’t Afford to Pay”
?
Warning lights should be flashing and klaxons sounding if you hear this from a customer. They are obviously holding off creditors left and right and you need to escalate the situation quickly to make sure you are at the front of the queue.
Payment Performance Deteriorates
?
You get to know your customers. You know which ones pay on time every time, and if a pattern of late payment suddenly emerges for a business that previously paid quickly, it’s time to do a rain check. Try asking your contacts at the business if something is up. Look for news articles about the company (if it’s large enough to figure in the media) and run a credit check report on the business to see if there’s anything going on.
?
领英推荐
Mail is Returned
?
A letter returned in the post is a sign that things might have gone badly wrong at the company that owes you money, although it could just be that they’ve moved offices without a forwarding service. Check their website to see.
?
Most of us invoice by email now, and often these services will continue to run automatically even after a company has switched off the lights and locked the doors. A returned mail with a ‘mailbox full’ message is a bad sign, although it could just mean that the person has left the company or gone on a long holiday. A returned message saying ‘non-existent domain’ is also a bad sign as it could mean that the company has failed to pay web hosting fees to their service provider and been cut off.
Excuses, Excuses
?
The creativity of debtors in finding excuses to explain why they didn’t pay / can’t pay their overdue debts never fails to surprise us Clearly, if the excuses just keep coming for a past-due invoice it’s time to escalate the process of collection.
Adverse News or Loss of a Major Customer
?
If you hear on the industry grapevine that a customer has lost one of their major contracts, or had some other major blow its time to start paying close attention to their invoices until you’re confident that their payment practices are unaffected.
?
Credit Reporting Services
?
Many of the credit checking agencies run a subscription model so that once you’ve run a report on a customer you receive email alerts to warn you of significant changes in their credit score. Remember that a credit score is only a ‘snapshot’ at one moment, and based on the information available at the time. Things change and it’s well worth subscribing to a service like this. Before you give credit do a quick check at Companies House and see if the company has filed accounts. If they have no filed accounts look at director(s) personal guarantees otherwise you are effectively financing their business.
?
?