Are your customers refusing to pay for work done?

This blog is designed to help make customers refusing to pay for work done a thing of the past. There are three simple rules to get your customers to pay, and on time:

  • Make sure your paperwork is “spot on”.
  • Have a good system to ensure you closely monitor your debtors.
  • Get yourself a good credit controller.

Make sure your paperwork is spot on

CRS’s background is in construction debt where the contract is all powerful and the need to make sure all invoices and/or applications for payment are supported by an irrefutable paper-trail. In short you need to make sure your invoice, with your own terms and conditions clearly accessible, is supported by evidence that the goods have been delivered and signed for, or the work has been done and has been acknowledged and approved by the customer.

The construction industry is such that, irrespective of what the heads of large construction giants are saying publicly, there will always be a QS, on site, 100% focussed on their own position and the need to bring the job in, on budget. If you slip up in the paperwork you are giving them the opportunity to query your payment, pay less, pay late, or not at all.

Even with simpler contracts where delivery of goods, or services is all that is required, there is a need to get a proof of delivery, acceptance of the goods in a merchantable condition, and, with services, that the work has been done to the requisite standard.


Have a Good System

Gone are the days of card index files but businesses used to run on such simple systems and/or a hand-written note in the diary. Nowadays most accountancy systems run a sales module including an in-built diary system to flag up debts as overdue at pre-input milestone dates; certainly all factoring companies have a system upon which they make their funding available and, at cut-off dates (usually 90 days) debts become “disallowed”.

Most accountancy firm are nominated sellers of financial software and can sell, and install systems to make sure your sales ledger is managed correctly. That said, its only a system and it depends upon actions being carried out.

Get a Good Credit Controller

Systems do not naturally drive successful actions. They may send out letters and/or e-mails but unless these are effectively delivered they are largely ignored and, for all the efficiency that technology can deliver, a human voice is still the best way to get people to pay with dignity and relationships remaining intact. Sure, you can issue;

  • Letter 1 – Polite reminder
  • Letter 2 – Slightly miffed and vaguely threatening
  • Letter 3 – Pay up – orelse!

There are systems that will do all this for you. You then move onto;

  • Solicitor’s Letter 1 – Indignant
  • Solicitor’s Letter 2 – last chance! Then,
  • Solicitors Statutory Demand

Followed by County Court Judgement etc.…


However, when dealing with customers refusing to pay for work done;

At some point along the way, the intervention of a human voice asking for payment, enquiring why this has not been made, trying to encourage a settlement or even a substantial part payment may prevent expensive costs and discourage your customers from playing your own system against you.

If you do not have the resource to do this, CRS offer a “human solution”, where we will ring your debtors and report the problems they have in paying, or encourage them to settle their outstanding invoices whilst there is still an opportunity to keep things civil. ITS GOOD TO TALK!

If you are interested in our outsourced credit control service you can request more info below.

Request more information on Outsourced Credit Control or a FREE, no obligation APPRAISAL OF YOUR DEBTOR BOOK.

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