It’s unfortunate but the more people you work with and do business with, the more problems you’ll face.
One of the biggest challenges a start-up faces is CASHFLOW, small businesses need good credit control… cash is king!
When a client says, “we can’t pay you until we get paid” what do you do?
When a payment is overdue, what do you do?
I frequently read posts on LinkedIn – “what do I do if my client won’t pay the overdue invoices… advice needed please?”
Until Non- Payment happened to me I didn’t know the answers to give any advice to the LinkedIn posts. Unfortunately, now it has happened to me, one of my clients has failed to pay me and failed to resolve the issue amicably I wanted to share the protocol of what you should do and who you should speak to, to get back the money you are rightfully owed.
You should at the start of any business relationship get a legally binding contract signed and returned. In the contract and additionally your terms and conditions of business, it should outline all the points that outline exactly what is expected whilst working with/for your client most importantly your payment terms.
If you then work with that client and they fail to pay you within your terms of conditions and signed contract, you need to email or record all the conversations you have with them to try and resolve the issue amicably.
If you then cannot agree and resolve the issue between yourselves, you need to proceed to the next stage. A legal letter then needs to be sent via recorded (proof of) delivery with full details of what has happened what you expect and how much you are owed, you must include that you are giving your client 14 days to respond to your letter or pay the money owed. Further information and a letter template can be obtained from the Citizens Advice Bureaux.
If you still do not receive payment from the client after the 14 day period has expired. You can then file a money claim via the Gov.uk website. The form is online and can be filled out and sent electronically, you then need to send via email all of the information and proof of your claim.
To take a client to court there is a charge and it goes up in increments, depending on how much you are claiming. The fees are outlined below.
|Claim amount||Paper form fee||Online claim fee|
|Up to £300||£35||£25|
|£300.01 to £500||£50||£35|
|£500.01 to £1,000||£70||£60|
|£1,000.01 to £1,500||£80||£70|
|£1,500.01 to £3,000||£115||£105|
|£3,000.01 to £5,000||£205||£185|
|£5,000.01 to £10,000||£455||£410|
|£10,000.01 to £100,000||5% of the claim||4.5% of the claim|
|£100,000.01 to £200,000||5% of the claim||You can’t make a claim online|
|More than £200,000||£10,000||You can’t make a claim online|
Keily Adey is the Director of Stay Connected Virtual Assistance Ltd.
Stay Connected supports companies and professionals with administration, telesales, marketing, social media and book keeping on a one off per task, part time or ongoing basis.
You can contact us for rates and services on 01902 798189 or email via the contact page on the website.