Late payments are a major problem for small businesses across the UK, affecting cash flow to such an extent that it is one of the biggest causes of small businesses going under.
However, professionals at a High Wycombe-based law firm say that there are steps that small businesses can take to recover their cash when things go wrong and customers fail to pay them on time for the goods or services they have provided.
Lawyers at Reynold Parry Jones LLP say that businesses should not be afraid to consider their options when it comes to taking action.
Robert Hill, a Partner at the firm, said: “A solicitor’s letter can often be the prompt that a late payer needs to settle the debt. This is a cost-effective way to reduce the chances of problems escalating.
“Where a debtor doesn’t pay up after a letter, there are then a variety of options that can be considered, depending on whether that debtor is a business or a private individual and the value of the debt owed.
“These options can range from seeking County Court Judgments to Winding-Up Orders or Bankruptcy proceedings.
“Often the threat of action will lead to a satisfactory resolution and experienced lawyers will be able to advise on the most appropriate and cost-effective courses of action.
He added that seeking legal advice at an early stage is key and can help avoid mistakes that could undermine a case.
“Where matters do come to court, it can be possible to recover the debt with interest, compensation and costs,” he added.