Category Archives: Debt Recovery

Our £75 Instruction Fee

If the credit control approach has proved unsuccessful in obtaining payment, £75 plus vat secures our service at pre action stage and avails the client of 25 years legal experience. The fee covers “due diligence”, credit rating information (corporate bodies), pre action warning letter and follow up call. We aim to recover all fees, late payment compensation and interest.

Debt Recovery Services – with Acquit

For more information – please call Diane Bantten on 01202 432022

Excuses Excuses Excuses!

10 Late Payment Excuses…

 “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.

Late Payment Legislation changes

Posted by diane.bantten


Listen up …. some good news for businesses.  Late Payment legislation has at last been updated as from 16th March 2013.

The Late Payment of Commercial Debts (Interest) Act 1998 has been updated with effect from 16 March.

What has changed?

The Act continues to apply to contracts for the supply of goods or services where the customer is either a business or public authority and still imposes a statutory rate of interest of 8% over Bank of England Base on late payments unless the parties have agreed a ‘substantial remedy’.  However the Act has been amended so as to:

  • impose maximum payment periods;
  • limit the amount of time a purchaser has to verify goods or services; and
  • increase the amount of payment enforcement costs a supplier can recover.

These changes only apply to contracts under which statutory interest is accruing (ie if there is not a ‘substantial remedy’ under the relevant contract).

The maximum payment period

In a contract where the customer is a public authority the parties can agree a date for payment of up to 30 days from the latest of the customer:

  • receiving the goods or services;
  • receiving the supplier’s invoice; or
  • verifying that goods or services conform to the contract.

If the customer is a business, the payment period can be up to 60 days after the latest of the events listed above. The period can also exceed 60 days but only if expressly agreed by the parties and if it is not ‘grossly unfair’ to the supplier.

The maximum verification period

The Act limits the amount of time purchasers have to verify the conformity of goods or services to 30 days, unless the parties expressly agree a longer period and that period is not ‘grossly unfair’ to the supplier.  Longer periods may be appropriate in particularly complex contracts.

Recovery of costs

Suppliers were already able to claim a fixed sum of between £40-£100 (dependent on the size of the debt) under the existing legislation to compensate them for the costs of recovering late payments.  The changes introduce the additional right for a supplier to claim the difference between the reasonable costs it incurs in debt recovery for example when you instruct Acquit Debt Recovery! Any unreasonable attempt to exclude either the fixed sum or top-up costs will fail.

Contract Law and Terms of Business

Posted by diane.bantten

Contract Law – a recent case.

Azimut-Benetti SpA v Healey [2010]

A contract contrained a clause entitling a yacht building company to damages of 20% of the full contract price on the buyer’s default.  The buyer argued that the clause was a penalty clause and thus unenforceable.  The trial judge disagreed finding that the clause was commercially justifiable as providing a balance between the parties upon lawful termination.

This brings me neatly on to terms and conditions of business.  What do you do if you don’t have any?  You could :-

1. Write your own.

2. Download a template from the web.

3. Let your solicitor or lawyer have a go.

4. Copy some terms from a competitor.

5. Let Acquit write your terms.

Whichever option you choose should depend upon why you need business terms and conditions. Do you want some professional-looking text simply to look, well, professional? If so, then all you need to do is choose Option 2 i.e. download a cheap generic set of terms from the web.

If, however, your business will be offering goods or services on credit then you need a set of business terms suited for this purpose. This is because a great set has the ability to:

i) help prevent late payment by your customers or debtors. ii) give you real options in case of late payment or non-payment by your customers.

1. Write your own. If you have some legal training or higher education in commercial and contract law, then you could draft your own terms. But how long would it take you? And how can you be sure that you include everything important, especially from a credit management perspective?

2. Download a template from the web. If you are on a tight budget then this might be an option. But do you know who wrote the original terms and conditions template? Do they work in practice? How will they stand up in court if you need to enforce your rights? Who will create the additional clauses you’ll need for your particular business and industry? How much customisation is possible? And, again, how can you be sure that they include everything important, especially from a credit management perspective.

3. Let your local solicitor or lawyer have a go. Yes, they have the training. But in practice, how many sets of terms do they create for local businesses on a regular basis? One or two a month is usual because many solicitors are also busy focusing upon divorce, conveyancing, probate and litigation work. And the biggest question here is how much will a solicitor charge you for a fully bespoke set of terms and conditions?

4. Copy from a competitor. Whatever you do, don’t be tempted to copy a competitor’s terms and conditions. If you are caught, then there could be financial penalties and even worse, the negative publicity to suffer as a consequence.

Copied terms are rarely sufficient to protect the business fully. This deficiency is usually due to either lack of relevant credit management terms or the absence of clauses which address key legislation such as the Data Protection Act, Sale of Goods Act etc.

5. Ask Acquit Debt Recovery to create your business terms and conditions. We will fully-customise for you a set of terms and conditions that will be right for your business.

It is possible to word your terms so that your business can benefit financially from a free debt collection service and from massive improvements in your cash-flow.

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!