What is it that the business sages say? Revenue is vanity and profit is sanity? Agreed but most self-styled Linkedin gurus will not tell you the real truth: cash is king. If you have money you can play with profit all you like but you can only run out of money once. Then you’re done. This is what we wish to avoid and prevention is better than cure.
JCLM know how frustrating and damaging it is to be not paid on time. While we work to try and maintain business relationships, should a debt remain unpaid after it has fallen due, we have vast experience of all stages of the debt recovery process: through issuing Letters before Action (if you are trying to recover money from a partnership or a limited company); Late Payment Letters (a written demand for payment of a debt and statutory late payment compensation within 7 days); and Pre-Action Protocol Letters (a written demand for repayment of a debt within 30 days if you are trying to recover money from an individual or sole trader).
Should the above not succeed then it may be necessary to move towards a pre-action protocol letter which is a written demand for payment of a debt within 30 days: this is essentially the first stage of the court process: the Pre-Action Protocol for Debt Claims (“the Pre-Action Protocol”) pioneered a new process for recovering payment of debts and it is crucial that the correct process is followed. The Pre-Action Protocol essentially seeks to avoid court action by encouraging early exchange of key information such as statements of account and income and expenditure and encouraging parties to look to settle: JCLM has experience of settling many disputes at this stage without the need to go to court. It is also important at this stage to look at the means of the debtor: if after investigations it emerges that they simply can’t afford to pay it may be time to cut losses rather than throw good money after bad.
There are times however when the pre-action stage does not result in payment and court action does become necessary: JCLM can assist with this and any with any steps needed to enforce a judgment awarded in your favour for example a charging order or a third party debt order or an attachment of earnings order.
The most important takeaway? Try and avoid disputes (and certainly litigation) in the first place. Having coherent Terms of Business in place from the beginning helps with this: you will then know when you are to be paid- preferably on presentation of your invoice with the ability to charge late payment interest on sums remaining outstanding after 30 days. With an effective Dispute Resolution clause -which will require ADR or mediation or negotiation between the parties in the event of a dispute- you will be able to resolve most issues without having to go anywhere near the doors of the court. You can then get on with doing what you do best: running your business and keeping your customers happy.
JCLM offers a monthly service for SMEs we advise on day-to-day matters (such as Terms of Business) plus risk, compliance and litigation for a monthly fee.
More details can be found at www.jclmsolicitors.co.uk