If your business is threatened by chronic late payments, it is time to talk to us about our Process Server Service.
Many SME owners know the stress associated with late payments all too well. According to research conducted by Bacs Payment Schemes Limited in December 2018, more than a third of SMEs wait two months beyond the agreed terms to be paid, making late payment a serious threat to their survival. Subsequent consequences of bad payment practices include cash flow difficulties, a decrease in productivity, a decline in profit growth or even the failure of the business.
To avoid being a victim of bad payment practices, SMEs can trust Blackhawk Intelligence to assist them and ensure that late payments are a thing of the past. By employing our Process Server Service, we can help you make a Statutory Demand – a written warning requesting the debtor pay you.
What does a Process of Service entail?
This process involves notifying a business that legal action has been taken against it. As a renowned London based process server operating in the UK and abroad, Blackhawk Intelligence will effectively carry out the process – and can use expert tracing services if difficulties arise.
When can you make a Statutory Demand?
A Statutory Demand can be served to an individual or a business, and the party will have 21 days to either:
- Pay the debt
- Reach an agreement to pay the debt
If the company or individual does not respond to your Statutory Demand, the next step is to apply to bankrupt your debtor.
To do this, you can:
- Start bankruptcy proceedings against any individual who owes you £5,000 or more by presenting a bankruptcy petition to a court requesting for the debtor’s assets to be taken and sold to pay their debts.
- Close ‘wind up’ a company that owes you £750 or more by presenting a winding-up petition to the company, which is also known as compulsory liquidation. If successful, the process involves the company’s assets being sold and the funds being paid to you.
Why is cash flow critical for small businesses?
For a business, regardless of its size, adequate cash flow is essential for it to run smoothly. If invoices are not paid, then there are numerous knock-on effects, such as the business not being able to pay their suppliers.
There is a distinct and real danger that smaller companies lower down the chain can go out of business. That is not a good thing, not just for the business owner, but also for the companies that they were supplying or for the staff working for them. The pool of competitive services is then reduced, and businesses could be forced to increase prices or reduce their own profitability to accommodate the changes.
This year, the government has vowed to put an end to bad payment practices by implementing a system where large companies must make a board member responsible for late payments to small businesses while reporting their progress in an annual report.
Bad payment practice is an ethical problem
There is no real excuse for delayed payments unless of course, the business in question has its own financial problems. Larger companies have been known to pay their service providers on their own terms and have gotten away with it because, in some cases, their suppliers are dependent on their continued business. Then there are the bureaucracy and payment cycles, which slow down the payment process in larger businesses – for example, the process of gathering many signatures and approvals required to get an invoice.
Take proactive action through regular due diligence
One of the best ways small businesses can protect themselves is to conduct regular due diligence before allowing their payers to accumulate outstanding debts. This procedure should include running credit checks and acquiring references before working with them. Companies House, a registrar of companies and information to the public, and The London Gazette, the UK’s official public record, can also be of use in terms of examining a business’s background.
Alternative tips to putting a stop to late payments include:
- Making sure your terms and conditions are right – asking your customers to accept these in writing before doing business with them.
- Alleviating payment risks – requesting a deposit in advance before supplying your goods or services.
- Getting acquainted with your customers to know how they work and what they require.
- Following up on late payments quickly, so your customers know that you are quick to deal with outstanding payments.
- Reducing credit terms for businesses that keep paying late – tightening payment terms for repeat offenders.
Trust Blackhawk to collect your debts
If all else fails when it comes to chasing up late payments, you can rely on our trusted Process Server Service. By employing this service, our dedicated investigators can efficiently assist you with the recovery of debt, particularly if you feel that financial fraud may have been involved.
Contact us today on +44 (0)20 8108 9317 for more information on how our Process Server Service can help you.
This article was updated on 24/07/2019.
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This post is intended to provide information of general interest about current business issues. It should not replace professional advice tailored to your specific circumstances.