Late payments from clients are a common issue that can significantly impact a business’s cash flow and operations – particularly SMEs that may lack the cash reserves of larger businesses.
They may be caused by:
Whatever the cause, there are steps you can take to recover payments for services or goods rendered.
It can be hard for business owners to challenge clients over unpaid invoices, but it’s not always necessary to proceed to formal channels. To recover unpaid invoices, you can:
This can be a lengthy process, particularly if you have to proceed to litigation. Remember that you have a right to reclaim costs owed when you have rendered a good or service.
If a business that owes you money for a service cannot pay its debts – i.e., it is insolvent – then you may be able to issue a winding-up petition if the company owes you more than £750 and you can prove that it cannot pay you.
This is a petition to the Courts to close a business and sell its assets to pay its creditors if the business cannot pay its debts.
If the Courts find that the business is insolvent, it may issue a winding up order, which will trigger the sale of assets to pay creditors. However, be aware that you may not recover everything you’re owed if the business doesn’t have sufficient assets to cover the debt.
If your business is struggling to recover unpaid invoices, please contact us today.
