- 10 Jul 2024
- •
- 2 min read
Strategies for In-House Lawyers and Compliance Teams in Recovering Unpaid Bills
As in-house lawyers and compliance teams navigate the complexities of payment delays and rising staff shortages, Elizabeth Ryall outlines strategies to bolster the repayment of commercial debt.
The ongoing cost of living crisis is straining the finances of countless households across Britain, and businesses are not immune. Small businesses, in particular, face significant challenges from delayed payments and increasing staff shortages. Extended bill waiting times are depleting cash flow, making it harder for businesses to manage their rising costs. As customers tighten their spending, income is also decreasing.
Strategies for Encouraging Repayment of Commercial Debt
To mitigate these issues, businesses need to take proactive steps to reduce bill waiting times and optimise cash flow through efficient recovery actions. By implementing a robust process that complements existing credit control procedures, businesses can increase bill payments and prioritise swift repayment from repeat offenders. Addressing late payments is critical, especially as businesses currently lack sufficient government support to bridge the gap between service or product delivery and bill payment.
Key Recommendations:
- Prompt Referral to a Commercial Debt Solicitor: Any overdue invoices should be promptly referred to a third-party commercial debt solicitor for immediate action.
- Enforcement of Contractual Provisions: Ensure the enforcement of late payment and interest provisions stipulated in contracts.
- Statutory Compensation: Leverage statutory compensation under the Late Payment of Commercial Debts (Interest) Act 1998, which allows for compensation of up to £100.
In the short term, these measures will help prioritise the collection of unpaid invoices and the additional compensation and interest can offset the cost of instructing a solicitor. In the long term, businesses will benefit from the assurance of having expert support and guidance, while customers will recognise the importance of adhering to payment terms.
Trethowans’ Support for Local Businesses Trethowans provide flexible cost options and seek practical resolutions for any entrenched debt. For a consultation on debt-related issues and to receive a no-obligation quote, contact Elizabeth Ryall at 023 8082 0524.