Review your cash flow before Christmas
Don't let debts fester over the holidays
The last few weeks leading up to Christmas can be a frantic time. Whatever your business, there are sales targets to achieve, projects to finish and deadlines to meet. The extra pressure of dealing with these issues is bearable when clients and customers are happy and your invoices are being paid on time.
But, what if there's not enough cash coming in and your bills are piling up?
It only takes a couple of key customers to delay paying you, for Christmas and the New Year to take on a rather bleak outlook.
Don't just sit there worrying: seek advice
If you are concerned about your cash flow and outstanding debts, our key guidance is to "take action"! Don't just ignore the problems and leave them for after Christmas or even the New Year. It's true that payments might just come in tomorrow or next week but, in our experience, the sooner you act, the more chance you have of recovering payment or sorting out your debts satisfactorily. Don't leave it until the New Year: you'll spend precious holiday worrying about the finances.
What action can you take if you are owed money?
Our debt recovery team has years of experience in advising businesses on how best to handle debt recovery. Most debts only require a couple of straightforward processes to prompt payment. For example, we can:
- write a "letter before action" on your behalf to the debtor; or
- if the letter before action does not result in payment, we can start court proceedings in the Small Claims Court; or, alternatively,
- in some cases, where the debtor is unable to pay their debts as they fall due, we can start winding up proceedings or bankruptcy proceedings.
However, debt recovery can also give rise to more difficult issues. For example:
- the debtor might dispute that they owe all or part of the payment to you;
- the debtor might be complaining about the quality of the goods or services you have supplied; or,
- you might not feel able to take action say, for example, if the debtor is a personal friend or an important customer you don't want to irritate.
Whatever your position, we can help you devise a strategy to get your invoices paid.
What action can you take if you owe money to another business?
If you have received goods or services from another business (the creditor) but not paid for them within the agreed time, it is important for you - as the debtor - to act as soon as possible. Failure to do so could, ultimately, result in the creditor taking you to court or even, if it is proved that you are not able to pay your debts as they fall due, making you or your business insolvent.
Quite often, ignoring the creditor will only make the situation worse. For all you know, the creditor might be prepared to extend the time for payment or accept payment from you in stages.
The position can be more complex if you are not happy with the goods and services you have received. If they were defective or sub-standard in some way, you might be able to negotiate a reduction on the amount you owe.
Whatever your position, we can help you to reach an agreement or compromise to deal with your debts.
To discuss your concerns, contact Christopher Burke on 0161 684 6941 or make an enquiry.
Posted 11 December 2016Subscribe to our newsletter
Please note that the information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by Pearson Solicitors and Financial Advisers Ltd or any of its members or employees. Professional legal advice should be obtained before taking, or refraining from taking, any action as a result of this article.
This blog was posted some time ago and its contents may now be out of date. For the latest legal position relating to these issues, get in touch with the author - or make an enquiry now.