Bad debtors can be very dangerous for any businesses, having a damaging impact on cash flow.
Here are our top 10 tips for avoiding bad debts:
- Obtain a credit reference on the organisation that you intend to trade with
- Avoid doing business with companies whose credit rating is poor
- Ensure that the other company knows your payment terms at the outset
- Invoice at the earliest opportunity
- State the payment terms clearly on your invoice
- If payment is not received by the due date, send a reminder as soon as possible, and certainly no longer than one week after the due date. It is good practice to have a policy to chase the debt after a fixed number of days following the due date
- If there is still no response, chase up the debt by telephone. This will enable you to determine whether there are any queries on the invoice and, if not, to discuss a date for the settlement
- Write to confirm the agreed settlement.
- State clearly that the matter will be referred (after the agreed extended period) to either:
- A debt collection agency
- A firm of solicitors, or
- The county court small claims department
- If the debt is still due after this, keep your word and take action
Do you need good professional company debt advice?
It can be difficult to know how to cope or where to turn to get good company debt advice when your business debts are mounting up and spiralling out of control. Gibson Hewitt have been providing professional business advice, for over 25 years, to businesses facing financial difficulties. We qualified as Top Rated Licensed Insolvency Practitioners as a result of all the glowing reviews written by our clients on VouchedFor.co.uk, the leading national review site for professionals, obtaining a 4.7 satisfactory score out of 5! You can see what our clients have said about us here
One hour FREE consultation, with no obligation.
We help struggling companies with business debt on a daily basis. From the first FREE Consultation with us, we aim to take away your stress and worries. We pride ourselves in offering clear, practical, realistic business advice and we are confident that we can help rebuild your financial future with a solution tailored to suit you.
For more information please call Lynn Gibson on 01932 336149