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Essential steps to effective debt recovery

Author: Sarah Naylor

For any business, having unpaid invoices on the books is frustrating and can have a serious impact on cash flow; particularly for small businesses.

It is important to keep on top of invoices and not delay chasing payment. Yet, unpaid invoices are often left for much longer than they should be, simply because business owners are unsure how to deal with the situation.

If an invoice is outstanding, despite reminders, the next step is to start a debt recovery process. This will involve a solicitor sending the debtor a formal letter before action. If payment is not made then court proceedings can be issued to recover the money.

Court action may seem daunting but research shows that the formal letters sent by solicitors result in two thirds of outstanding invoices being paid within seven days, removing the need for any further action. They also demonstrate to customers that you are on top of your business operations and expect to be paid on time.

You can help protect your business with these simple steps:

  1. Have clear payment terms written in your contract with the other party and also clearly stated on your invoice
  2. If you do not have contacts in place we would recommend that you consider having these drawn up, whether working with someone as a one off or on a repeat basis, a lack of written terms can really put your business at risk if things go wrong or a dispute arises
  3. Don’t delay chasing payment any outstanding invoices. When the payment terms are up (e.g. 21 days), send a polite reminder. If payment isn’t received within 7 days consider having a solicitor send a formal letter before action to chase the payment.

Do you have a problem with overdue invoices?

We have a team of experienced solicitors who can help recover the payments due and offer a fixed cost service for preparing and sending letters before action. Contact us on 01302 320621 or email

Get in touch today