Dealing with poor payers and bad debts

Every small business will have a problem with an unpaid debt at some stage. Whether the debt is £20, £200 or £2000 it is annoying and, at worst, can cause serious cash flow problems for your business.

There is help out there, however, and it does not have to be expensive and difficult to deal with a debt.

Start by looking at The Better Payment Practice Campaign, www.payontime.co.uk. You can sign up and include their logo on your invoices. They also have a page of essential letters which will help you start the debt chasing process yourself. The information on the site will help you be clear about how you can charge interest and debt recovery costs on unpaid bills.

If you are looking for legal help in chasing a debt, you may be worried about the cost. In fact there are a number of ways to access free or low cost legal advice. I’ve had help from my union in the past over late payers. If you don’t have a union and run a small business think about joining the Federation of Small Businesses which offers legal advice as part of the benefits of membership. Thomas Higgins, www.thomashiggins.com is a firm of a solicitors that offer an online debt chasing service which costs from about £2 for a simple solicitors letter which may be enough for some non payers.

Finally, you can take the debtor to court to reclaim your money. There is plenty of guidance here and information specifically for small businesses here from Her Majesty’s Court Services.

We all hope to avoid bad debts, but I hope that this article shows you that there are simple and affordable ways to deal with a debtor, and people who can help you.

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