Overdue Invoices: 6 Steps How To Deal With Late Payments

Overdue Invoices: 6 Steps How To Deal With Late Payments
Signed work was done. You issued invoice and waited patiently for it to be paid as you have a right to it. But the payment deadline has passed and there’s no sign of your money. What next?
6 steps you can take dealing with late payments

 

1. Email reminder
The customer must pay you within 30 days of getting your invoice or the goods or service.
If the payment deadline has passed, send a follow up email within a few days with a copy of invoice attached. If you don’t get a response, send another.

 

2. First formal letter
Write a first formal letter and enclose invoice or statement.

 

3. Second chasing letter
You have a statutory right to add interest and compensation for debt recovery costs.

 

4. Final chasing letter
At this point you can introduce the option of passing the overdue amount to an external debt recovery service.

 

5. Letter before action
However, if you want to press on without outside help, write a letter before action that gives the debtor one last chance to pay before you go legal.

 

6. Money claim
You can apply to a county court to claim money you’re owed by a person or business.

 

Finally, in case you do decide to take legal action, the court will want to see you’ve given the debtor every possible opportunity to repay – such as email reminders. Keep these as a record and send follow up letters by recorded delivery (keeping proof of postage).

 

If you need professional help with a persistent late payer contact us. We believe that the best thing you can do is involve a third party to collect the debt for you. It immediately escalates the seriousness of the situation in the debtor’s mind and makes them more likely to pay up quickly.

 

Contact us

 

Whatever you decide to do, it will involve time, effort and money.

 

Remember that before taking any major decision regarding the management of your business or freelance career, you should take advice from qualified professionals such as accountants, lawyers or business advisors.

 

Contact us

 

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About Diana Hurta

Founder / CEO at DH Accounts & Legal Ltd.

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