Before pursuing an unpaid invoice, consider these five key points

Unpaid invoices can have a significant impact on cash flow, taking up valuable time and resources when businesses would rather focus on growth and day-to-day operations. While it can be tempting to move quickly to formal recovery action, taking a few key steps at the outset can improve your chances of a successful outcome and help avoid unnecessary cost or delay. Before pursuing an overdue debt, consider the following five points.

1. Confirm who is legally responsible for payment

Identify the correct legal entity that owes the debt. A trading name and a registered company are not necessarily the same, and pursuing the wrong party can delay recovery and increase costs.

2. Review the terms that were agreed

Check the contract, terms and conditions, purchase orders and any relevant correspondence to establish the payment obligations, due date and we can calculate any applicable interest or recovery costs.

3. Ensure delivery or performance can be evidenced

Confirm that you have clear records showing the goods were delivered or the services were completed in accordance with the agreed terms.

4. Establish whether a dispute has been raised

Clarify what is being challenged, when the issue was first raised and whether the dispute relates to the full balance or only part of the invoice.

5. Assess the debtor’s financial position

Before committing further time and cost, consider whether there are signs of insolvency or other financial difficulty that may affect prospects of recovery.

A strong recovery strategy begins with a clear understanding of the legal, evidential and commercial position.

How we can help

If you have an unpaid debt and are ready to take action, contact Gina Hope to discuss the next steps. Find out more about our debt recovery team.