Overdue invoices during COVID-19

Whilst we encourage forbearance and support at this time, it is vital to the UK economy that we keep the cycle of business cashflow moving. Quite simply, any invoices that were due before the Government announced the UK lockdown on 23^rd March should have been paid. No doubt your customer will have invoiced their customer for the goods or services and will be keen to secure payment. This is called the ‘trickle effect’ – we are all suppliers somewhere in the chain and we need to keep the trickle of orders and payment moving in order to protect UK businesses. Breaking the chain with non-payment will have an impact on smaller businesses – which many might not survive.  We need to keep the chain moving.

So, how do you keep cashflow moving, make sure you get paid and protect your business from the impact of non-payment?

1) Don't delay in contacting overdue accounts

Make sure that your credit control – or the person identified to manage this part of the business if staff have been furloughed, contact customers as soon as payment is due. Best practice is to place a call or email in ahead of the due date to remind customers that the invoice is due for payment and is expected. This is also an opportunity to identify any potential problems where customers may be struggling, and if applicable, settle on a payment plan that suits both parties.

2) Monitor your debtor book

Categorise your current debtor book and consider how these customers might survive this pandemic. Are your current customers financially stable enough to weather this storm? Look at identeco.co.uk to get a clear insight into your customers' current stability and financial health. Consider requests for more relaxed payment terms for customers who are likely to come out of this stronger. This will likely strengthen relations, protect your business and help you focus on key clients if you have reduced headcount due to furloughed workers.

3) Make sure you know who you are dealing with

It has never been more crucial that you carry out due diligence on new customers. All new customers should credit checked so that you have a full understanding of their ability to pay you. identeco’s Business Support Toolkit (annual subscription is £79.95 + VAT) will not only provide you with a financial health check score for any UK company but also insights into directors, days sales outstanding and any detrimental data associated with that firm.

4) Act quickly when payment isn't made

If your current credit control efforts haven’t been successful, you need to move swiftly. Statistics show that recovering payment in significantly faster the earlier a debt recovery firm is instructed. Many, including Controlaccount Plc, work on a no collect, no fee basis which presents zero risk in instructing them. A good debt recovery company will be professional – protecting your reputation as well as collecting the overdue amounts, negotiating acceptable payment plans should additional support be required.

If your business is struggling in recovered unpaid invoices, please call our team on 01527 549 522 or email to find out how you can recover outstanding invoices today.