Prosperity Law
  • Home
  • About Us
  • Services
    • Conveyancing
    • Commercial Disputes
    • Commercial Litigation
    • Commercial Property Law
    • Corporate And Commercial
    • Debt Recovery
    • Employment Law – Individuals
    • Employment Law – Businesses
    • Healthcare Services
    • High Net Worth Clients
    • Insolvency Law
    • Intellectual Property
    • Settlement Agreements
  • Notary Public
  • Clients
  • Our People
  • Blog
  • Contact Us
  • Tel: 0161 667 3686, 0151 958 0057

How to Avoid Bad Debts

Home / Blog / Covid-19 / How to Avoid Bad Debts
How to Avoid Bad Debts
November 10, 2020
by para
Covid-19, News

There is no escaping the fact that the disruption caused by Covid-19 is placing a huge strain on businesses across the country, particularly in those businesses operating in industries that have been hardest hit by the social distancing restrictions.
There are, however, proactive steps that businesses can implement into their working practices to mitigate these difficulties. We set out below some of our top tips to help businesses manage their cash flow and bad debts.

Your terms and conditions

Undertake regular reviews of your terms and conditions to ensure that they are up-to-date. Your terms and conditions should cover the following (non-exhaustive) legal points:

      • Payment terms (including provisions for default on payment);
      • Terms relating to delivery of goods or performance of services;
      • A limit/cap on your liability for providing the goods or services;
      • The term of the contract and notice for terminating it; and
      • Which law shall govern the terms of the contract.

Critically, you must ensure that your customer receives a copy of your terms and conditions before you provide the  goods/services. Printing your terms and conditions on the back of your invoices will not offer you complete protection – particularly if the invoice is only sent after the goods/service has been provided.

Battle of the forms

A common argument in legal proceedings is whether the seller’s or the purchaser’s terms and conditions apply. The basic position in this regard is that the prevailing terms will be the last version that was put forward before the contract was formed.

Continued supply to bad debtors

We strongly recommend that you do not continue supplying goods/services to debtors who are already significantly behind on their account. Whilst this can result in a difficult conversation with your customer, you should not shy away from it. If a customer needs you to supply more goods/services then you are in a strong position to require payment for outstanding invoices – and even to require payment up front for future supply.

Firm demands for repayment

Your final demand for payment to the debtor ought to be clear, succinct and firm. It should also include a final warning that you will engage solicitors to commence proceedings to recover the debt unless it is paid by a specific time.

Instructing solicitors

As a general rule of thumb, the older the invoice, the less likely it is to get paid. Therefore, the sooner you take steps to attempt to recover the debt, the more likely you are to get paid. Whilst no-one (except lawyers) enjoys finding themselves in an adversarial situation, it is sometimes unavoidable when faced with a stubborn debtor. You will be pleasantly surprised at how quickly a debt gets paid after a letter of demand has been issued.

Prosperity Law LLP specialises in recovering bad debts on flexible, low-cost arrangements. We understand that cash flow is essential to keeping your business afloat and whether you are owed a few hundred pounds or several thousand, we can help recover money owed to you.

For information on how we can assist you in debt recovery, you can call us on 0161 667 3686 or contact Cristina Rueda.

Bad DebtsCash Flow
Share
Previous Post
How is the dental practice market reacting to COVID-19?
Next Post
Removing A Director and/or Shareholder From A Company
Categories
  • About
  • Copyright
  • Covid-19
  • Employment
  • Events
  • GDPR
  • Healthcare
  • Insurance
  • Law
  • News
  • Notary Public
  • Solicitors
  • Tax
  • Uncategorized
MANCHESTER OFFICE

Vantage Point 4, Hardman Street, Spinningfields, Manchester, M3 3HF
Opening Hours: Mon-Fri 9am- 5.30pm

Get Directions

Tel: 0161 667 3686

Follow Us
Useful Links
  • Home
  • About
  • Services
  • Our People
  • Blog
  • Contact Us
Latest News
  • Employer FAQ’s – Changing Employee Terms & Conditions
  • 2021 – A New Year in Dentistry
  • Prosperity Law Liverpool Appoints New Partner

Copyright Prosperity Law © 2020. All Rights Reserved Sitemap Prosperity Law LLP is a limited liability partnership registered in England and Wales (number OC340697) authorised and regulated by the Solicitors Regulation Authority (SRA 533585). whose registered address is at The Office Suite Top O’Th Hill Farm, Meadowhead Lane Norden, Rochdale, Lancs, OL11 5UL. A list of members is available at each office.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish.Accept Privacy Policy
Privacy & Cookies Policy

Necessary Always Enabled