Monthly Archives: November 2010

10 Late Payment Excuses …..

Posted by diane.bantten

“I can’t afford to pay you until my customer has paid me” – This is a tad tricky; can your customer make an acceptable immediate part payment? You need to pin your client down; insist on an immediate part payment and then suggest a review in 2 weeks’ time.

“The cheque is in the post” Oh that old chestnut it keeps cropping up doesn’t it! Explain it has not been received and should it ever arrive you will destroy, then provide your bank account details and ask for an electronic bank transfer.

“I’m not paying I have a dispute” If there is a genuine dispute then its imperative you establish what the dispute is and whether its genuine or bogus.

“I haven’t received your invoice” Scan it in to your computer and e mail it to your customer whilst asking for an electronic payment.

“I sent the invoice back to you it didn’t bear the right purchase order number” Ensure that you get your documentation right first time so as to remove this as an excuse. If you receive purchase orders PLEASE PLEASE PLEASE read the small print. Make sure your invoice bears the correct info and is addressed to the right person/company – if in doubt telephone the customer upon receipt of their order to double check.

“No one here to sign a cheque” ask for a BACS payment

“The Director/Owner has died” Ok very very occasionally this may have tragically happened and although sad you still need your money! If the firm was a sole owner then the business has ceased, however, it may continue to be run by a relative in effect taking over the reigns. In law you may have a claim against the Estate however, you may wish to consider your position and take legal advice depending upon the size of the debt.

“You will have to wait until we have paid our suppliers” this is not acceptable. Explain your payment terms and pursue the money tirelessly!

“I am in the process of changing banks” this should be no barrier to dealing with payment, who in business closes one account without another being fully operational!? Ask for a credit card payment or set up a Pay Pal account.

“We have ceased trading / are in liquidation / receivership” Often a red herring to throw you off scent!  You need to work out precisely how and when this has occurred. Is the company in a formal involsncey – you need to find out what firm of Insolvency Practitioner has been appointed and contact them.

If the business has merely ceased trading you need to satisfy yourself that the business has not assets in order to make a commercial decision as to whether or not it would be appropriate to uprsue the debt  via legal channels.

As always, if you would like any help with any of the above problems then give Acquit a call.

Take Control – Cash is King!

Posted by admin

Controlling your cash-flow is of paramount importance; after all, it is the life-blood of your business. Now is an excellent time to review your credit control procedures. If you find you are being paid consistently late, legislation was introduced to try and protect you from this situation. The Late Payment of Commercial Debts (Interest) Act 1998 and was introduced in 2002.

The legal status of the business you are seeking to claim interest from is irrelevant. Late payment interest can be claimed except in the case of personal debt. You can have the best credit control procedures available; however, often the debtor will only pay up when threatened with action.

It pays to seek professional advice at the point of non payment. Contact from a third party such as Acquit will grab your client’s attention. A third party can assist you in maintaining a good relationship with your client who should understand that in these tough times cash is king and we all deserve to be paid on time!

My top tips

Posted by admin

So, is there an element of alchemy? …… Maybe!

  1. Review your current credit control procedures – include your bank details on your invoices and ask for electronic payment it will boost your cash flow.
  2. Do your homework – when supplying new customers obtain a credit report.
  3. Ensure your terms of business are up to date – be proactive and chase early.
  4. Ensure your terms of business are notified to your client at the very beginning of your relationship .
  5. Demand interest and compensation.
  6. Enforce your terms of business, if you are due payment on day 15 ensure that you pick up the telephone and ask for payment, follow that with a formal letter of demand.
  7. Ensure the lines of communication remain open.
  8. Don’t allow your client to fob you off – be firm.
  9. When all else fails give me a call!

The Alchemy of Debt Recovery

Posted by admin

The definition of “alchemy” is supernatural power! I have had the accusation levelled at me that I do in fact possess a gift when it comes to the skill of recovering monies that are owed to my clients. I am not sure that being called a witch is terribly complimentary!


The reality is that providing my client prepares the ground work and, keeps his or her house in good order then my job is made that much easier. Well documented files are a must should it come down to non payment because of a dispute.

That preparation by my client starts at the point of sale… It doesn’t matter whether my client is selling a widget, recruitment services, scaffolding, accountancy, or marketing services, the list is endless. What does matter is that you know your customer / client as intimately as possible.

For instance, when someone comes to you for a service do you have any mechanism in place to obtain a credit worthiness score? Alternatively, do you have an account application form which helps you gather as much information as possible and includes the option of seeking referee details? Do you seek references?

If none of these steps are appropriate to your particular business sector then have you ensured that you have strong terms and conditions of business, terms that have been reviewed recently and are enforceable? Are your terms notified to your client prior to the striking of the deal? Furthermore, have those terms been acknowledged and accepted?

So many of my clients are quite happy that their terms have been incorporated into the contract, however, they are disappointed when I point out that adding their payment terms on an invoice, for instance, “Payment terms 14 days” it’s far too late. The deal has been done, the work carried out and the contract to all intents and purposes has been closed.

You cannot introduce a new term to your contract following its conclusion unless it has been agreed by both parties – it’s just too late. For the most part however, the customer will pay up… eventually!

Let’s talk about your credit control procedures for a moment. Do you have any procedures in place? If not, now is an excellent time to get your book-keeper to review your systems in terms of what happens following conclusion of a job or supply of goods / services? A number of smaller businesses don’t have anything in place at all and put their faith in their customer paying up on time. Although I hate to be the harbinger of doom and gloom, the current economic climate does not look set to improve any time soon, clients are hanging on to their money for as long as possible and in some cases your client won’t be in a position to pay you because they too are waiting to be paid! I believe it’s called the domino effect… Sad, but true, many larger companies, who can pay you, believe that because of their powerful position in the market and their importance to you as a client, they can stretch their payment terms to 90 + days. What do your terms of business say with regard to late payment? Some time ago now, legislation was introduced to try and protect you from late payers. The Government introduced the Late Payment of Commercial Debts (Interest) Act 1998 – it was introduced in 2002.

The legal status of the business you are seeking to claim interest from is irrelevant. It can be a sole proprietor, partnership or limited liability company. You cannot apply late payment interest however to personal debt.

Let’s wind back a bit, you have picked up on the fact that you have not received payment – I would hope that you have some sort of diary system in place that alerts you or your book-keeper to the fact that your money hasn’t arrived. What’s the first thing you or your credit controller should do? It is essential that you get in touch with your client – I always prefer talking to people when it comes to money – it is so easy to ignore a letter, e mail or text!

Putting people on the spot, politely of course, is the best way to establish whether there is a genuine reason for non-payment. Are they a cannot pay or won’t pay case? If the “cheque is in the post” make sure you make a diary note to follow it up in say 5 working days time. If after 5 days your cheque hasn’t arrived, and depending on how patient you are inclined to be, suggest an electronic bank payment. Better still if you have access to a card machine then offer to take a debit or credit card payment. Please avoid sending out standard letters before you have spoken to your customer – again standard letters are easily ignored.

Now might be a good idea to calculate the interest and compensation your client now owes you? For help in calculating interest and compensation there are many self help websites out there. Have a look at which is very helpful and gives the answers to many “frequently asked questions”.

If you didn’t state a payment period in your terms of business, the aforementioned legislation states that a payment becomes “late” after 30 days. Currently you can charge 8% above the prevailing Bank of England base rate. In addition, you can charge compensation on each and every individual invoice.

The amount of compensation that you can charge depends upon the amount of the invoice.

Up to 999.99 you add £40.00 per invoice
1,000 to 9,999.00 you add £70.00 per invoice
10,000 and over you add £100.00 per invoice

It may be enough to advise your client that if the payment does not arrive as promised then you will add interest and compensation.

If it is the case that they are not able to pay their debts as they fall due consider entering into a stage payment agreement – but beware – don’t get yourself into a position where should you need to sue at a later stage they are able rely on some onerous term that you agreed to in order to secure payment.

In my experience it pays to seek professional advice at the point of non payment. Your customer will often sit up and pay attention when they are contacted by a third party seeking payment on your behalf. A third party can assist you in maintaining a good relationship with your client who should understand that in these tough times cash is king and we all deserve to be paid on time!

Welcome to our blog!

Posted by admin

Acquit Limited is pleased to announce the appointment of its third Director – Bob Bantten. He has until now been the unsung Creative Director of Acquit and was responsible for the naming of our Company. He has provided lateral thinking and marketing strategies for Acquit. Welcome on board!

Further news – Acquit is pleased to announce that with every new instruction received, a Credit Report will be obtained without charge where it is a commercial entity who is indebted to you.