This week’s news has been flooded with reports about the collapse of Carillion and the impact that this is going to have on its supply chain, many of which are SMEs.
In response, a trio of banks have launched emergency funds to support smaller businesses which have been affected. HSBC, Lloyds and RBS have agreed to provide a total of £225m to help companies in Carillion’s supply chain. It is hoped that other banks will follow suit.
When faced with a client that goes into liquidation or gets into financial difficulty, SMEs have to move quickly to protect their cashflow and get back on track. The move by these banks to support those affected by Carillion is therefore vital.
For those that don’t have access to these funds, or for any business that has been affected by a client going into liquidation, the next step is to tighten up your debt recovery process, so that you get to the top of the pile and get paid first:
- Conduct a thorough review of your other creditors to assess any outstanding debts and to prevent any further financial difficulty.
- Don’t be afraid to be persistent if a customer delays payment – follow up and if promise to pay is made, follow up again on the date payment was promised.
- If you follow up debts by phone, send an email afterwards so that you have a record of the conversation in writing.
- If you are still struggling to get paid after following up, seek specialist advice.
The Debt Collection Centre is a specialist debt recovery service offered by city law firm Devonshires offering a one-stop-shop for businesses suffering from late payments. The team sends an initial letter before action on a no-collection, no-fee basis and progresses the matter in-house through the Courts using the firm’s specialist solicitors.
For speedy assistance in recovering money owed or further advice on tightening up your debt recovery process, please contact our specialist team.