This is the first time ive had this issue and im sure it wont be the last.
I have a customer that owes a little bit of money, they purchased some items of me back in Jan this year, they asked for credit but i said no, the deal was cash on delivery.
The problem started as a 3rd party done the delivery not all the cash was payed, i got a phone call asking if i could wait a few days as he was waiting himself for Paypal payments to arrive.
Them few days past and he stated he wanted some more goods and could i hold out until the end of the month.
Any how hes payed just two payments in 4 months with the remainder owing to be cleared by the 30th of April.
Until this week hes been very chatty but its now gone all quiet, yet i know hes still buying of other companies.
So whats the general opinion and what actions would suit best?
I have chased payments myself in the past, and when clients were delaying the payment the procedure normally went something like this:
1. Friendly reminder and statement (in the post) prior to due date
2. Due date arrives - copy of invoice and phonecall chasing payment
3. 15 days after due date letter is sent requesting payment
4. 30 days after due date official letter is sent detailing action that will be taken and another phonecall
To be honest, sometimes you could go round and round that procedure over and over again.
You might benefit from an accountant who can keep on top of this for you. Or maybe factoring?
When you say your debtors owe you a little money how are much are we talking about here...?
If it's a trade debtor how about threatening them with late payment charges under late payment legislation in the first instance? Check out www.payontime.co.uk for more information.
You could end up threatening to sue them or actually issuing proceedings against the debtor but it may be a better comprimise to hammer out a post-dated cheque plan if need be as an alternative.
If you need any any more tips/guidance you can PM me.
The thing is the late late payment legislation detailed on www.payontime.co.uk only deals with business to business transactions, is your debtor a private individual or in business as a sole trader, limited company etc? If it's the later, don't worry about being "polite", go for the juggler and say if no payment within seven days you'll apply the £40 late payment compensation charge and interest as of the date of the unpaid delivery and reserve the right to sue as well. If it's a private individual just give them seven days notice of your intention to sue and that you will include costs and statutory interest if you have to commence legal action.
If he's buying off of companies while he's stalling you he is effectively using you as a bank, sorry but it's true.
If it comes to legal action, with costs and interest you may be able to push this over the magic £750 threshold and then you can threaten insolvency
The customer runs an Arcade so purchased the equipment to earn money there, we have no written credit agreement as i never agreed to the credit, but i have emails and signed documentation showing the goods arrived.
Hes buying of other customers i deal with via Ebay and as the trade is quite a tight knit group we all know who does what.
My wife is happy to open a small claims online with him but i felt this might be a touch to harsh this early on - Im far to nice.
This topic comes up a lot on forums, for very predictable reasons. And then people get all defensive, and protective of the fact that their customers dont do this to them.
So here is the perspective from the real world, where people routinely, and ordinarily pay late.
1. Stop talking about penalties, late payment charges and that kind of nonsense. Try that, and I will just never pay them.
2. Stop rushing into legal action. The moment that happens, it is too messy. This is strictly a last resort.
3. Do pick up the phone and talk to people who owe you money. And talk to them nicely. It is a sales call, not an angry call.
4. Work out each customer's payment patterns. If they pay you, on the button, at 90 days, that is fine, so long as you have built the cost of that into your charging. And if you cannot afford that, you cannot afford that customer. Or you can negotiate something different.
4. Send invoices out quickly.
5. Send statements out. Large companies use these to prepare payment runs. So do some smaller companies.
6. Send polite, written letters chasing payment if it falls overdue. There is no exact rule, but something like a letter at 40, 60, and then 75 days, with ascending levels of precision about what the debtor must do. Intersperse the letters with phone calls.
Only go the legal route if the amount warrants it. Trust me, it is fraught with problems if you shout too soon. I recently received a court letter for a debt. I had no idea we owed the money - the original invoice had been mislaid. One phone call, and a copy invoice, would have sorted the problem out. I paid the original bill the same day, and appointed a new supplier. They will be out of pocket on the legal costs, because I will never pay them.
So remember. Be real. Be reasonable. Be courteous. Be firm. Be systematic.
That way, you will get the best available outcome. I wish you every success!
This topic comes up a lot on forums, for very predictable reasons. And then people get all defensive, and protective of the fact that their customers dont do this to them.
So here is the perspective from the real world, where people routinely, and ordinarily pay late.
1. Stop talking about penalties, late payment charges and that kind of nonsense. Try that, and I will just never pay them.
2. Stop rushing into legal action. The moment that happens, it is too messy. This is strictly a last resort.
3. Do pick up the phone and talk to people who owe you money. And talk to them nicely. It is a sales call, not an angry call.
4. Work out each customer's payment patterns. If they pay you, on the button, at 90 days, that is fine, so long as you have built the cost of that into your charging. And if you cannot afford that, you cannot afford that customer. Or you can negotiate something different.
4. Send invoices out quickly.
5. Send statements out. Large companies use these to prepare payment runs. So do some smaller companies.
6. Send polite, written letters chasing payment if it falls overdue. There is no exact rule, but something like a letter at 40, 60, and then 75 days, with ascending levels of precision about what the debtor must do. Intersperse the letters with phone calls.
Only go the legal route if the amount warrants it. Trust me, it is fraught with problems if you shout too soon. I recently received a court letter for a debt. I had no idea we owed the money - the original invoice had been mislaid. One phone call, and a copy invoice, would have sorted the problem out. I paid the original bill the same day, and appointed a new supplier. They will be out of pocket on the legal costs, because I will never pay them.
So remember. Be real. Be reasonable. Be courteous. Be firm. Be systematic.
That way, you will get the best available outcome. I wish you every success!
You have some very good points there Paul, i guess sometimes we can all put an invoice to the end of the month to juggle other costs or be cheeky and push it into the next month to help a weak month look better.
I did get some contact today from my customer who says he will try and pay a bit sometime this week, i guess a bit is better than nothing.
How to deal with non payers? 
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