Almost all SME businesses will experience late payment and also make late payments.

There is a big difference between being paid a few days late or being asked to accept payment by instalment to constantly being “fobbed” off or being given a list of broken empty payment promises.

Knowing what to ask, who to ask and when to ask them is key to the outcome. Will an email, or standard chase letter work, of course they will in a significant number of cases. Yet knowing your customer, and their payment trend and having a conversation is the best place to start when payment has not dropped in within seven days of due date, and no response has been received to any standardised chase letters/emails that you may have set up.

Never be afraid to call and ask the question “Is there a problem I notice we have not received payment yet?” In most cases an explanation of some kind will be offered. Keeping an open mind and fully listening to the explanation will help, keep in mind the saying “You cannot get blood from a stone”. Try to work with your customer if you can, if they propose a part payment it may be good to take it, it will reduce the debt.

Ask them to confirm what they are proposing in writing, confirm acceptance in writing remembering to confirm what you will do if they do not stick to what has been agreed and if they don’t adhere to it then follow it through.

So, to summarise:

1: Talk to your customer, make sure you talk to the right person a good place to start is often the Purchase Accounts Supervisor, if you do not get a realistic explanation then ask for someone higher in authority. Check Companies house for strike off notices, run a credit report and look at the accounts, are there any CCJs? Does it look like they can pay?

2: Keep an open mind and listen, work with them, confirm things in writing, set deadlines and consequences and follow them through.

3: Rather than taking the risk of going around in constant circles, refer it to a firm like ICM who work on a no recovery no commission basis, excluding legal and professional fees should they become necessary.

The longer you leave an overdue debt the harder it is to recover it in most cases.