What to do when a customer will not pay your invoices

When a customer will not pay your invoices, what can you do about it?

Collecting invoice payments from clients should be a simple, routine, and streamlined process, especially if you already have systems in place to provide quotes/payment agreements and invoice/ process payments in a timely manner. 

Unfortunately, regardless of how professionally your invoicing process is carried out it is ultimately up to the client to pay, and this doesn't always happen on time or as planned.

When it appears that you won't be able to get paid for the hard work you've done (or a product you've provided) it can be easy to become frustrated and overlook available options. If you're after a client who is refusing or is unable to pay you based on your agreement with them then consider the following:

Start By Issuing a 7-day Payment Request Before Taking Action

First, send them one final request for the payment containing the details of the original payment agreement you had with them. Be sure to let them know that you will be taking them to Court and filing a claim against them for the amount due if they are unable to make payment within 7 days of the request issue date. 

It may also help to remind them that they may be held liable for interest and Court fees, and that it would be much easier and less stressful for them to simply pay the invoice instead.

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Shaun Barton
Business Debt Expert

If the amount is less than £10,000, you can submit a Small Claims Court N1 form

Keep a copy of the payment request and if the client fails to pay it within 7 days be sure to use this documentation when you take them to Court. To begin the process of taking them to Court you can file an HMCS claim online. If the Court rules in your favour then the debtor will be required to pay what they owe you plus the cost of Court fees and interest.

If the Amount Owed is Greater than £750 Then Issue a Statutory Payment Demand

If the client is a limited company and owes you more than £750 then your next step should be to serve a statutory payment demand. This is a formal document that requests payment of the amount due within 21 days. If this payment request is not met then you would have grounds to present a winding up petition in Court. This would lead to the compulsory liquidation of their company.

It should be said here that initiating winding up proceedings against a company is an expensive step to take, so you should ensure you have exhausted all possible recovery options first.

How Real Business Rescue can help

We understand that delinquent invoice payments can be a major burden on a business, especially when cash flow problems are already present. If your customers late payments are causing you to experience financial distress, you should seek professional help and advice.

The experts at Real Business Rescue can help when it comes to exploring possible finance options to instantly boost your cash flow, or provide the help and advice you need if your company needs to enter into formal insolvency proceedings to rescue your business from financial difficulty. Contact the team today on 0800 644 6080.