TM LAWS TOP TIPS TO HELP MAKE SURE YOU GET PAID

1. Know who you are dealing with. Sounds really obvious but is not only crucial but very often got wrong.

2. You can deal with someone as an Individual, as a sole trader, as a partnership or as a limited company. Identify which they are as soon as you start dealing with them – not later on during the trading relationship! As some do to their cost…

3. Get their full legal name whatever capacity they are dealing in AND check what they tell you, so do a credit search or a search at companies house.

4. Once you know who they are you need to start making provision for if they don’t pay you. Start collating information on them to keep for later on.

5. Ensure that on all orders, invoices and paperwork you have their correct title.

6. If you are dealing with a limited company get a guarantee from the directors.

7. Ensure that the personal guarantee is in a deed as there is no need for there to be consideration. So signed and witnessed with the witness putting their name, address and occupation.

8. As soon as the invoice is overdue do something about it. In my experience the longer a debt is left, the harder it is to recover. So have a good system of credit control in place.

9. Reasons for dealing with bad debts promptly:

10. Firstly the person or company may be hard to find! Then they will often say that they think it’s outrageous coming after them after all this time, and try to suggest that you are in the wrong for leaving it and pursuing them after all this time! Then you have the problem that any financial information that you hold is likely to be out of date!!

11. Also if they are starting to get into financial difficulties get in first to have a chance of getting your money back- many times sued, got judgment and then charging order when acting for a finance company clients –result = they were a secure creditor so good chance of getting their money if person/company went down.

12. When you start trading with someone keep any financial information that you get, i.e, keep details of any bank accounts that you pay money into or receive money from. Find out who they are dealing with, what premises they have and so on. The more you find out the better chance you have of recovering money you may be owed later.

13. Make sure that all the orders you receive are in writing so that it is clear what the order is and who placed it. Likewise make sure your invoice mirrors the order. It is quite common for them not to!

14. If there are changes to the order or in the case of building works, extras and similar make sure that any changes are documented. It is very common for someone to deny there were any agreed extras and extra costs. If it is in writing very difficult to argue!

15. During your dealings with the customer keep your credit checks up to date because their credit ratings do change and that is the time to decide if you want to keep giving them credit…

16. If they don’t pay an invoice without good reason- don’t carry on blindly dealing with them, find out why it hasn’t been paid and decide if you are happy to carry on dealing with them….

17. If they haven’t paid without good reason get proceedings issued and get a judgment. The sooner you have a judgment the sooner you can take steps to enforce it – more of which in part 2.

If you want some more information or help on recovering outstanding debts please contact us at TM LAW and we will do our very best to help you recover the money owed.