ALPHA DEBT RECOVERY LTD

LINDA WALTON - MANAGING DIRECTOR

CASH FLOW IS KING – LONG LIVE THE KING !!!

Knowing your customers Terms & Conditions Invoicing Honest, Reliable and Fair Chasing your Payments When all else Fails !!

Knowing Your Customer Check out exact name & legal

status of business you’re supplying. If sole trader/partnership they may be liable for debt so make sure you have full details. Get FREE check from www.companieshouse.co.uk web check service.

Don’t be afraid to push for all info at this stage – its much easier now than later on !

Watch out for “friendly” references – choose your own they will be more effective.

Invest in credit referencing information it could save you a bad debt – we charge £35 for this facility.

Set rules that you will apply and don’t be tempted to break them, even if put under pressure to supply urgently.

PAYMENT TERMS Set out & agree payment terms in

advance & in writing. Its better to know what to expect than leave things to chance.

Watch out for any wording in documents from your clients that changes the agreed terms ie. If you accept their order you might be signing to their new payment terms if you fail to challenge at this stage their terms will take precedence.

Payment terms on your invoices should include the words –”We will exercise our statutory right to claim interest (8% over Bank of England base rate) & compensation for debt recovery costs under the late payment legislation if we are not paid according to our agreed credit terms”.

Even if you don’t intend to do so it is a very useful deterrent against late payment.

Raising a further invoice for interest and late payment charges is a great way to gain your clients attention and raising the profile of your outstanding invoices

If your client tells you they will have to take longer to pay in the future, you will have to decide how important their business is. If they are claiming extended payment terms for invoices already raised, you should demand payment under the previously agreed terms and make new agreement for future trading with extended terms – should you wish to do so.

INVOICINGVital first step in achieving healthy cash flow

Ensure invoices are fully compliant with HMRC if VAT registered visit: www.hmrcvatinvoices.co.uk

The sooner you ask the sooner you get paid – send by 1st class mail or email.

Get invoices right – raising credit notes or re issuing invoices takes up time better used elsewhere & changes payment due date !!

Have a system for resolving disputed invoices promptly to avoid stalling tactics.

What should be on your invoice ?

Your full name & add. Your VAT no. Invoice date. Correct client name. Correct client add. Delivery add, if different. Delivery date and

method. Customer purchase order

number Full description of

goods/services supplied.

Accurate quantities, prices, discounts and total amount due.

Payment terms and due date. How payment should be

made with your Bank details on it.

Invoice or reference no useful if paying by direct credit.

Add words – we will exercise our statutory rights to claim interest @ 8% over Bank of England base rate & compensation for debt recovery costs under late payment legislation if we are not paid in accordance to our agreed terms and print your terms and conditions on the back of invoice.

TREATING SUPPLIERS FAIRLY

Cashflow keeps business’s in business, if YOU don’t pay on time consider the consequences – you want your invoices paid on time so ensure good and ethical business practices at all times

Make sure payments due are in your cash flow forecast so they don’t catch you by surprise.

Talk to suppliers early if you have a problem preventing prompt payment.

Paying promptly – earns your business respect, may allow you to negotiate better deal or discount in the future.

Helps you avoid possible late payment fees/interest. Ensures suppliers don’t stop your credit. Improves trading relationships. Makes you a more valued customer. TREAT YOUR SUPPLIERS AS YOU WANT YOUR

CUSTOMERS TO TREAT YOU !!!

CHASING PAYMENTS !!! When you get paid the sale is

complete. When a customer doesn’t pay they’re hanging on to money that is rightfully yours and you should ask for it.

Have a routine system forfollowing non payment thatincludes letter/statement – email – telephone, but be prepared to act more quickly if it is for a large amount or you are concerned about the customer.

My Top Tips on chasing payments

If the invoice is large call the customer before due date to make sure they have received it and there are no problems, this is good customer service.

Make immediate contact when payment has not been received, be assertive about what you expect and when you expect it, make the consequences of non payment clear. Follow up promises to make sure they are met.

If a client persistently pay late get them checked out & consider if you are prepared to continue on credit terms. It may be better to lose a client than suffer a bad debt because that way you lose the goods and money owed.

Be polite, persistent and professional. Do what you say you are going to do and when you said you were going to do it !!!

When all else fails Sometimes you just can’t get paid. You’ve done all

the right things and still your money hasn’t arrived. The longer the debt remains unpaid the more likely it is going to turn in to a bad debt which affects your cash flow, profits and damage to your business

OPTIONS TO CONSIDER

Using Debt recovery company to act for you – Often work on a NO WIN-NO FEE basis, collecting debts is their specialised area and most will escalate action as and when it becomes necessary, a %age of monies collected is usually applied which can be very high. Most companies offer a wide range of services including Tracing of debtors/credit checking/stat demands and winding up orders. Statute of limitations states that debts up to 6 years can be recovered in England & 5 years for Scotland

HMCS money claim online and for Scotland small claims in the Sheriffs court.

Issue a stat demand that can be followed up 21 days later with a bankruptcy (individual) or winding up order (company) as long as debt is over £750, however if you force company in to liquidation you risk the chance to recover any money at all.

INSOLVENCY

BANKRUPTCY – applies to individuals/sole traders & individual members of partnerships. Petitions may be presented to court by creditors who are owed £750 +

IVA – individual comes up with a proposal to pay off debts this can be done by a licensed insolvency practitioner and is an alternative to bankruptcy

Continued….

COMPANY VOLUNTARY ARRANGEMENT – a formal proposal is drafted at a creditors meeting to pay part or all of the debts, if accepted by the creditors the arrangement becomes legally binding & the directors will retain control of the company.

COMPULSORY LIQUIDATION – is the winding up of a company or partnership vis a court order. A petition is presented to court by a creditor stating amount owed by that company and that they cannot pay. The official receiver becomes the liquidator when the order is made but an insolvency practioner may be appointed if the company has significant assets.

LIQUIDATORS ROLE – To realise the company’s assets, pay all the fees and charges arising from the liquidation, & pay the creditors as far as funds allow in a strict order of priority.

CREDITORS VOLUNTARY LIQUIDATION – similar to compulsory however it is the share holders that make the decision to wind up the company. A creditors meeting is held to nominate the appointment of a liquidator & consider a statement of affairs. A committee can be nominated to realise the company’s assets etc in the liquidators role.

ADMINISTRATION – applies to limited companies and partnerships and is intended to get the company out of trouble and trading again. The primary concern is to rescue this company as a going concern, if this is not possible then the administrator will work in a similar way to a liquidator.

HINTS & TIPS www.insolvency.gov.uk search for individuals for

bankruptcy or IVA’s The official receiver or insolvency practitioner will

contact you automatically if they know you are a creditor.

Any suspicions check out at companies house webcheck service

Insolvency enquiry line – 0845 602 9848 or email -insolvency.enquiryline@insolvency.gsi.gov.uk

If in doubt contact official receiver/insolvency practitioner to make sure they have details about your debt and 2 if you have any info on the assets or conduct of the individual or company concerned.

FREE ADVICE ON ALL YOUR RECOVERY NEEDS….

GOT DEBTORS RING US NOW ON :- 08445 048048

See testimonials on our website blogwww.alphadebtrecovery.co.uk

ALPHA DEBT RECOVERY LTD