ALMOST a third (31 per cent) of SMEs have experienced late payments costing their business critical money and time, according to industry research released by Hitachi Capital UK. More worrying are the figures released by the Federation of Small Businesses which states that over 50,000 smaller medium enterprises go under every year due to late and non-paying clients. The FSB estimate that the cost to the economy in the UK is as much as £2.5 billion and growing.

In these challenging times what options do businesses have when their invoices are not paid on time.

A lot of businesses have in-house credit control teams meaning chasing customers for money yourself is the first logical step.

Chasing debt and recovering money is a very time-consuming process that uses up valuable resources that may be more effectively deployed elsewhere in the business. In addition the stress and worry chasing old debts could also mean that newer, more recent debts are not given the time and attention.

Outsourcing your debt recovery can feel like a very daunting step for a lot of companies, however, choosing an established and reputable firm can really improve your business. The right debt partner will take time to understand your business and your clients and do all they can to protect your reputation as well as your established client relationships.

Specialist and experienced debt law firms are experts at recovering outstanding invoices. They have the time and expertise to recover the money on your behalf. More and more businesses are now outsourcing (white labelling) this part of their business having seen the benefit using a professional brings.

The final but arguably most powerful option is to escalate to legal action and this key strategy is becoming more and more prevalent especially in the commercial debt environment. Combined with pre-legal activity a specialist legal debt firm can explain in no uncertain terms the legal implications of non-payment. Having a debt partner who combines both the outsource collections option as well as the legal identity improves efficiency, continuity and will release the burden of bad debt.

For further help or advice, please contact Lupton Fawcett’s Robert Barnard on 07469 049216 or robert.barnard@luptonfawcett.law