Can your Customer pay your bills?

Will your Customer pay your bills?

….Or will they drain your business? Our Debt Recovery Solicitors Can Help

Cashflow is the lifeblood of any business. Your invoices need to be paid and our debt recovery solicitors can help, starting off with a Letter before Action.

But – Who is your Customer? Do you really Know?

Make sure you know who you’re doing business with…..

An Account Application form is a great way to get the information you need so you can establish “Who you are dealing with”.

Obtaining this information is an essential pre-requisite to granting credit, it establishes:-

  • responsibility for payment
  • determines what information is available to assess the ability of your customer to pay your bills
  • identifies the type of Company / Legal Entity you are dealing with

When it comes to Issuing, Enforcement and recovery, establishing the legal entity is critical.

We act on the information you send us, so it is important that it is correct.

How can you identify quickly and easily who / what your potential Customer is?

  • ask for a letterhead, which should contain the information you need
  • Search the Companies House Website (https://beta.companieshouse.gov.uk/) make a note of the Company Registration Number
  • have you considered completing a credit check

When you tell us the trading style your customer trades under, we then know the correct path for our debt recovery solicitors to follow when recovering your debt.

A quick guide to knowing your potential customer

These are the main trading styles

  • Sole Trader – Usually Mr Bloggs T/a Bloggs machines

A sole trader is personally liable for the debts that they incur. As a creditor this means that you are able to pursue the personal assets owned by the debtor which may not be connected to the business as long as they are owned by the debtor and are not subject to third party ownership or finance.

  • Individual – Mr Smith
  • Partnership

In a partnership – (two or more individuals trading together as one entity) the partners are personally liable for the debts of the business. Again, personal assets can be taken into account if pursued by a creditor, subject to the same exceptions as a sole trader. The partners are jointly and severally liable in respect of business debts.

  • Limited Liability Partnership – (LLP)

This is a partnership in which some, or all, of the partners (depending on the jurisdiction) have limited liability. An LLP exhibits elements of partnerships and corporations. In an LLP the partners are not personally responsible or liable for the business debts, it is the legal entity (LLP) who has responsibility for the business debts..

  • Private Limited Company – (LTD)

A Limited company is a separate legal entity and is run by Directors and owned by its shareholders. The Directors of the company are not personally liable for the debts of the business except where signed personal guarantees are provided to its creditors.

  • Public Limited Company – (PLC)

A Public Limited Company is usually a large well-known business, its shares are traded on the stock exchange.

In order to make the ‘Recovery’ process run as smoothly as possible please ensure:

  • The Debtor is identified as the correct legal entity (LTD / LLP/ Individual…)
  • You state if the debt is disputed – has your customer highlighted any concern over the debt?
  • The full amount of the debt adds up to the unpaid invoices listed
  • You identify what the debt relates to
  • Legible instructions are sent -Faxed or handwritten instructions can be very difficult to decipher, instructions received through the website are much easier to work with
  • All relevant information is completed and supplied – Client telephone number / Debtor postcode /email /  outstanding amount / Terms and Conditions / invoices

The smallest detail missing can have the greatest impact when it comes to us beginning the process of collecting your Commercial Debts.

The best advice our team of debt recovery solicitors can give is:

  • Consider who you are dealing with and whether they are good for the money
  • Please double check your instructions prior to sending

Ensure you get a peaceful night’s sleep – Leave your unpaid invoices in our Capable Hands

Please contact us or call us on 01922 700 730 for more information and a FREE initial discussion of your late payment problem.

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