Coronavirus: How can you recover outstanding payments while we’re locked down?
The Coronavirus pandemic has already had a huge impact on our everyday life. It’s also affecting the day-to-day operations of every business and given the current restrictions are likely to be in place for the foreseeable future, cash-flow is going to be crucial to your business’ ability to keep trading until the dust finally starts to settle.
With that in mind, here are some important tips to help you manage your cash-flow and recover unpaid invoices in the weeks ahead.
1. It is important to consider the sensitivities involved when chasing payment in the current climate. Often, there is a balance to be struck between taking a firm approach and understanding the difficulties that a huge proportion of businesses are facing in the current climate.
2. It is vital that payments are monitored and that you act quickly when arrears start to accrue. This will prevent the amounts owed becoming unmanageable and will lessen the impact on your cash flow. This is particularly important in circumstances where you are likely to be one of many of businesses that is owed money by the debtor.
3. Always consider alternative dispute resolution. The Courts will always encourage parties to work together to resolve any dispute and will want to see evidence of ADR if proceedings are ultimately issued.
4. If payment is not received, ask a lawyer who understands exactly how to deal with debt recovery for help. Often the final step would be to issue proceedings against the debtor but given the potential cost and consequences of doing so, it could well be more sensible to consider the alternatives first. In our experience, most businesses are keen to avoid Court proceedings if possible at the best of times, let alone now.
5. Always maintain a careful record of any contractual documentation you put in place with your debtor and any changes you subsequently agreed. If a dispute arises, it is vital that you’re able to lay your hands on the most up to date terms so that any steps you do decide to take will be backed.
6. Consider asking for payment on account before starting work.
7. Take early advice. As we’ve said above, it is often easier to resolve a dispute in its early stages whilst the monies due are relatively low. Taking early advice from an appropriately qualified/experienced solicitor is likely to be cost effective in the long run.
These tips were written by Andrew Broadbent, a Senior Associate in Keebles’ litigation and dispute resolution team. If you would like Andrew’s help to recover any outstanding payments to keep your cash-flow positive or with any other contractual dispute you may be having with a customer or a supplier, please call Andrew on 0114 2521416 or email email@example.com.