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Louise Coldwell
17-12-2002, 11:41 PM
Hi

Been thinking and its not what i wanted to think of,or one i didnt want to have to come across..........
How do i chase up late payments from my clients....?

What approach do i take when speaking with them?!

Lou

timbrown123
18-12-2002, 04:05 AM
Hi Louise,

Here's a guide to chasing late payment:

It is important to devise a clear system for chasing payment. This may involve written statements, telephone calls, official letters, final demands etc. It is also advisable to define when each of these is triggered, and to ensure that this policy is followed in every case.

Telephone calls may be a valuable means of chasing payment, particularly with longer-term customers with whom you have built a strong trading relationship. However, remember that you may need to have written proof of your attempts to chase payment, so don't be afraid to follow up your calls with an appropriate letter confirming the outcome of any discussions.

The following is an example of a debt tracking policy. Once established, it is important that all staff stick to the policy in their dealings with all customers.

Before supply - Get customer's acceptance of your terms and conditions of business
Month end - Issue written statement of account
30 days - Payment now due reminder
45 days - Phone call to customer accounts payable department - define and solve any reason for late payment. Issue Final Demand notice
60 days - Phone call to customer - identify any outstanding reason for payment failure. Letter outlining that account will go on stop at 70 days
70 days - Letter confirming account on stop
80 days - Solicitor's letter outlining intention to proceed with county court action if payment not received within 7 days
90 days - Instruct solicitors to commence county court action
Debt recovery

Tips for better debt recovery:

Define a structured approach to debt recovery and stick to it with every customer - be reasonable, firm and consistent.
Immediately confirm the outcome of relevant phone conversations in writing.

Be assertive and logical - not emotional - in the face of hostility.
If the client is withholding payment owing to a problem with your goods or service, attempt to rectify the situation as soon as possible.

Do not issue threats unless you intend to carry them through, and remember that it's your right under the Late Payment of Commercial Debts Act to apply late payment charges to overdue bills.

Louise Coldwell
18-12-2002, 08:23 AM
Hiya Tim..

Cheers for that,thats really good.Feel loads more comfortable now,wont be too worried about approaching the situation now!

I like the bit at bottom saying you can apply late payment charges on thier account....!!Maybe something i will have to look into.

Cheers Lou

timbrown123
18-12-2002, 09:17 PM
Hey Louise,

Oh yes, there's a lot of emphasis now on small businesses exercising their legal right to impose late payment fees, just as large businesses have been doing for ages.

I keep reading that clients failing to pay on time is one of the biggest causes of business failure as cashflow spirals down, and that you can take out credit insurance to protect yourself. There are a handful of different types of this insurance, where you can get cover for named businesses (useful if you have a few large clients) or you can get cover for all clients (useful if you run an online store for consumers). There was a police-warning yellow tape across this info, warning that credit insurance is not to cover you against companies with bad credit ratings; it is only to cover you if a company with a good credit rating fails to pay.

Hope that helps too!

Louise Coldwell
19-12-2002, 09:12 AM
Hiya Tim..

Really helped Thanks....Think i may have to look into doing this as have few customers already that are running over due date..!

Thats intresting about the insurences never heard that one before,will be intrested in hearing or finding out more re that one Tim!?

Cheers

Lou