Understand your company's position and learn more about the options available
Updated:
Written by: Jonathan Munnery
How can I get a customer to pay the money they owe my company?
You may be able to take formal debt recovery action if a customer repeatedly fails to pay the money they owe you. Your first step should be to issue a final request for payment and give them 7 days to pay what they owe. If this is unsuccessful, you may need to consider issuing them with a Statutory Demand.
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:
Free 60 Second Test
For Ltd Company Directors
What are you looking to do?
Choose below:
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.
“Shaun really helped me for quick legal advice in a stressful situation where I needed advice QUICK. Called me back within 30 seconds and gave me the advice I needed. Thank you”
Sam
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.
UK’s number one for director advice
We handle more corporate insolvency appointments than any other UK firm; demonstrating our commitment to helping directors and business owners in financial distress.
The team are available now - 0800 644 6080
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.
Real Business Rescue are here to help
Still unsure whether liquidation is right for your company? Don't worry, the experts at Real Business Rescue are here to help. Our licensed insolvency practitioners will take the time to understand the problems your company is facing before recommending the best course of action going forward based on your own unique circumstances.
- UK’s Largest Liquidators
- 100+ Offices Nationwide
- 100% Confidential Advice
- Supported 25,000+ Directors
Looking for immediate support?
Complete the below to get in touch
Free 60 Second Test
For Ltd Company Directors
What are you looking to do?
Choose below:
We provide free confidential advice with absolutely no obligation.
Our expert and non-judgemental team are ready to assist directors and stakeholders today.
Find your nearest office - we have more than 100 across the UK. Remote Video Meetings are also available.
Free, confidential, and trusted advice for company directors across the UK.