It is no secret that the Coronavirus crisis has negatively impacted the finances of thousands of successful and healthy businesses across the UK. Once thriving businesses may now be on the brink of closure. As we start to come out of lockdown, many will be attempting to recover their debts.
Businesses have tightened their belts when it comes to spending, customers have cancelled orders and many are delaying the payment of invoices because of cashflow difficulties themselves.
Whilst many businesses may have taken advantage of the Government’s Coronavirus Business Interruption Loan Scheme (CBILS) and the Bounce Back Loan Scheme, other businesses may have been reluctant to borrow their way out of trouble.
Most businesses will want to take measures to recover money that they are owed.
Increasingly, businesses are trying to understand their debt recovery options and some are unsure whether they can commence litigation during lockdown. The answer is yes.
However, the Corporate Insolvency & Governance Bill has made it more difficult to commence commercial insolvency proceedings.
Honest and open communication with your clients and suppliers may be the key…
Not knowing when to expect payment can be a huge frustration for businesses. If your customers are not paying on time and they are unable to pay you in full, work with them to produce a written proposal as to how they can repay what is owed even if it means receiving payment over a period of months. You should always negotiate with your customer in writing and leave a clear trial that agreement has been reached over the sum due and how it is to be repaid.
What can I do if I cannot agree a solution with my debtor?
If you cannot agree a solution or your customer choses to ignore your efforts to negotiate a settlement a Letter Before Action should be sent before any proceedings are issued.
The COVID-19 outbreak has hit many businesses, reaching out and talking to your valued clients and customers at this difficult time to agree on a plan for action for payment can prevent the need for formal legal action.
For any advice regarding debt recovery please contact us on email@example.com.