Getting invoices paid - how to deal with late payers?

[ferple]

Ta

Thanks everyone for the advice.

As it turns out, I just had a face-to-face with the client and they handed me a cheque straight away (along with some sheepish looks). I was about to mention the unpaid invoice during the meeting, but in the end didn't need to. I'll keep the advice in my back pocket for next time though.

[thunderlizard]

Make sure you know when their regular payment run times are, so you know when's the best time to remind them.
Using this knowledge, send them a reminder statement once the payment's overdue, then a few weeks later send another one with interest added on. The only time that failed to work for me, I told them I'd be turning up at their offices on such a date, expecting to be handed a cheque. I did, and was. That's the furthest I've ever had to take things.

[The Master]

It is also good practice to send statements every 30 days on a fixed day every month, which coincidentally should be about halfway from when you submitted the invoice to when the next payment is due. This should, of course, conclude with a debt history breakdown.

Think professional, act professional.

[VectraMan]

I did a similar thing earlier this year, and after 31 days I sent a friendly gentle reminder email to the boss. They paid up, by cheque, sent second class post, but got there in the end. As you say, they were just doing the small business thing of making every day count.

I'd keep it friendly at this stage.

[oraclesmith]

You get the same thing with bigger companies. See this thread http://forums.contractoruk.com/thread10301.html

[ferple]

Hmm, yes, thanks TheMonkey...

This is the first invoice (of 4) for the project, so I don't want to get heavy handed yet - just a gentle reminder at first. Thanks for the advice so far.

I have a fair idea that the company has the money, but they're just doing that small business thing of using up every single day of the payment terms (and then some). I just wish they'd have the respect for me to pay when I ask and not take the piss. I don't think they'll remain my clients very long if they continue along these lines.

[TheMonkey]

Invoice reminder kit:

1. White powder in an envelope
2. Baseball bat with added 6" nail and a 9 foot tall guy called Lance.
3. Dodgy dave's "asset" recovery and "limb removal" service.

[oraclesmith]

Yep I agree. I would say a couple or three reminders before resorting to court action. Also, make sure there is an opening for them to get in touch with you if they have difficulty paying - at least then you can renegotiate terms if necessary. If they are going under it will probably be a cashflow problem - it might be better to get small instalments agreed so that they can sort out their cashflow - and maybe not go under. If they do go under, you are probably not going to be a priority creditor so you may not get anything. In my opinion.

[ASB]

Maybe, but if it ends up in court it's usually best to have a paper trail so you could phone first and then send in a reminder starting 'Further to our telephone conversation this afternoon.....'. In my opinion.

Quite right. Some sort of paper trail is pretty much essential should it go to court. So, initial telephone reminder, written follow ups, then court. Without the written follow ups the court tends to think you are acting too quickly because you cannot prove you have taken reasonable steps to resolve.

[oraclesmith]

Maybe, but if it ends up in court it's usually best to have a paper trail so you could phone first and then send in a reminder starting 'Further to our telephone conversation this afternoon.....'. In my opinion.

[xoggoth]

Always found it easier just to phone up and remind them. Politely to begin with. That always worked for me until they went broke. If it starts to happen too often don't discount the idea that they are having financial problems. I lost about £1600.

[oraclesmith]

I'd wait a bit longer if I were you. Most companies will take the full length of the term and then some to pay, even though you'd like them to pay within the term. They probably have some creditors software which pumps out the payment on the payment run after the term has expired. Have a standard sounding reminder letter made up, so that they don't take it personally. Use a stronger one later and make sure you follow each one up with a telephone call to make sure they got it. Something like :-

Dear xxxxxx,

Re. invoice number yyyyyy for consultancy services, dated dd/mm/yyyy. Payment reminder.

Following expiry of the agreed terms of 30 calendar days from dd/mm/yyyy, the above invoice is now due for payment. We would greatly appreciate it if you would forward your remittance as soon as possible by cheque to the above address or alternatively directly into our company bank account 999999999 sort code 88-88-88 as agreed. Please make cheques payable to 'xxccccc limited'. Please do not hesitate to contact us on 989-98989989 or by e-mail at [email protected] regarding any issues or difficulties with making payment.

Many thanks,


xcxcxcxcxccx
Director.

[Ardesco]

http://www.payontime.co.uk/legislat...ation_main.html

http://www.fsb.org.uk/general/links/

[ferple]

I'm working on a fixed price contract (lucky me) and am invoicing the total cost in stages. I submitted my first invoice to my client 31 days ago, with payment terms of 30 days. Unsurprisingly, they have failed to cough up (they are a small company).

I'm about to chase the payment, but would appreciate advice on wording to use. I want to emphasise the fact that the invoice needs paying, but not be so blunt as to piss them off.

Comments from anyone with experience of chasing payment would be appreciated...

Cheers all.