How To Prevent Late Payment Of Commercial Debts
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Regardless of size, a high percentage of businesses in Glasgow will experience late payment of invoices at least once.
Historically, this has sadly become a common theme in daily business life that has shown no signs of stopping.
Preventing the late payment of commercial debts should be a top priority for any business that cares about its finances.
It is no secret that all organisations rely on a steady and secure cash flow in order to thrive.
This is especially true for smaller businesses that cannot accurately predict monthly turnover.
Whilst invoices can go unpaid for legitimate reasons, some clients may simply refuse to pay what is owed.
It is grossly unfair to the supplier for a client to ignore payment terms related to the goods and services provided.
Precautions can be put in place to help deter late payments and negate unpaid invoices from occurring.
We have put together this expert guide to help business owners suffering from late payment of commercial debts.
Tips To Prevent Late Payment Of Commercial Debts
It is never a nice situation when a business is owed money by one of its clients.
Staying calm is one of the most important things you can do when this sort of scenario occurs.
It can be easy to let the stress get the better of you, but there are ways late payments can be prevented.
Following these steps will reduce the number of times that debt collection services are required.
Monitor The Client’s Credit Rating
Prior to agreeing to work with any client, you should check the credit rating of the business.
This is an important step and is very common in most organisation credit control teams.
Taking time to investigate the credit rating of a business will indicate whether or not they are likely to pay.
Credit rating websites, such as Experian, will most commonly work off a traffic light system.
For example, if the credit check result is green, this means the client has a positive financial history.
If you have decided to work with the business in question, you should still regularly monitor the credit rating.
Late Payment Of Commercial Debts – Glasgow
Our trusted network of award-winning partners is able to help you recover any type of debt. Just complete our quick web form to use our free debt collection agency referral now.
Both Parties Should Agree On Payment Terms
Another effective preventative method is to agree on Payment Terms at the start of any work.
This document is to be signed by both the business and the client so they are aware of their obligations.
It details the cost of the services, when this is to be paid, caveats and any terms and conditions.
The due date for payment is commonly 14 days, 30 days, 60 days or 90 days after the invoice date.
The signed agreement will deter clients from trying to get away with not paying on time.
Claim Interest On Any Overdue Payments
Interest can be claimed on overdue payments thanks to the Late Payment Of Commercial Debts (Interest) Act 1998. This act extends to Scotland, England and Northern Ireland.
Claiming compensation when payments go overdue is a beneficial way to get the client to pay.
The rate of interest that can be charged on late payments is the Bank of England base rate plus 8%.
Although the threat of having to pay more if money is overdue is effective, debtors will still try to get out of paying.
If this happens, stricter action should be taken in the form of instructing a debt collection agency.
Commercial Debt Recovery Agency – Who To Choose?
When public authority figures cannot help and legal action is too expensive, you need to speak to the professionals.
At Debt Collection Glasgow, we provide our clients with the easiest way to recover the late payment of commercial debts.
Our recommended business debt collection agency is Federal Management.
Since 2004, they have quickly become the UK’s first choice for all commercial debt recovery requirements.
Regardless of whether you have unpaid fees or late payment of invoices, they can provide expert assistance.
They are authorised and regulated by the Financial Conduct Authority (FCA) to recover debts under the Consumer Credit Act.
The success rates that they offer are on average up to 90% on all undisputed debts.
The service they provide maximises results whilst minimising the cost overall.
Late Payment Of Commercial Debts – Glasgow
Our trusted network of award-winning partners is able to help you recover any type of debt. Just complete our quick web form to use our free debt collection agency referral now.