Brexit Survival for Businesses

As much as mere ‘Bouncing Boris’ optimism won’t avert a post–Brexit recession, it is possible that the fear of imminent economic doom can influence behaviour and lead to a self-fulfilling prophecy.

Get Tough on Late Payments & Unpaid Invoices

Logically, in times of uncertainty, consumers change their buying habits, curtailing and postponing their spending due, at least in part, to the risk of unemployment. On the other hand, businesses stop paying on time to increase liquidity or don’t pay at all, undermining confidence and fuelling concerns, and round and round it goes.

What’s more, businesses become increasingly reluctant to take formal action to recover their unpaid invoices through a misplaced fear of rocking the boat and damaging future commercial relationships as if doing more work or supplying more goods for free or on long term credit is a cogent business strategy! Then, of course, there’s the cost of solicitors and lawyers to recover the unpaid invoices and debts.

Regardless of which side of the political divide you’re on, most would agree that this does not make for good business sense and impacts on the wider domestic productivity and prejudicing our negotiating position in the global market.

As a nation of small and medium-sized businesses, often cited as the lifeblood of the economy, it is imperative that when the going gets tough the tough get going and firms implement a robust credit control and debt recovery process for unpaid invoices. Let’s be fair, if SMEs followed the example of our three-year Brexit negotiations, they’d be bankrupt by now.

A Change in Approach

Understandably if dealing with non and late payment was as simple as passing it over to a debt recovery agent, there wouldn’t be a problem, but it’s not and there is.

At its centre is the need for a change in our approach, starting before the invoice is issued let alone owed, by ensuring you have the right documentation and contract terms and conditions. These should include payment terms, late payment, termination and even retention of title.

While these won’t offer your business total protection, it does communicate professionalism and vigilance which will deter the chancers and opportunists from exploiting procedural gaps.

Secondly prioritise late payments, contrary to common opinion, time is of the essence, acting quickly by notifying the party of the default and setting out the process going forward is vital.

Third, escalate defaulters by taking formal legal action. Remember chasing and recovering money that’s owed to you doesn’t have to get personal or combative: it’s just business.

If there’s a genuine dispute for non-payment then this will invariably be expressed in reply to the initial demand, enabling you to analyse the problem and open a dialogue for rectification and payment.

On the other hand, if the debtor just doesn’t want to pay or can’t then the appropriate strategy can be deployed to affect the best result.

What’s more, it doesn’t have to be expensive, just effective. Engaging solicitors and barristers can be disproportionately expensive which ironically can divert attention away from the debt and onto the costs.

What we do know is, if you do nothing, you get nothing!

If you want to know more about the cost-effective solutions for recovering unpaid invoices and debts contact us today Stormcatcher Law.