Many contractors and small businesses are often reluctant to take a hard line on late payers for fear of losing future business opportunities. Recent changes to the level of costs that can be recovered on pursuing debts could therefore be a helpful way to encourage prompt payment without it becoming personal.
Flagging up the charges applied under the Late Payment Directive on your invoice reminders makes the point that there is a financial cost of leaving invoices unpaid. These apply from 16th March 2013.
If you have a late paying client, it is worth taking a clear approach to chasing the debt.
- Issue a polite reminder,
- Contact their accounts department directly to request payment.
- Let the client know that payment is overdue and will be referred for debt collection.
- Appoint a debt collection agency to pursue the debt without bringing this into your personal relationship with the client. The reasonable cost of this is added to the debt.
If you would like any help with overdue invoices or have a query contact CPA today on 0808 149 7287