If your business is suffering from late payments, there are vital steps you need to take to help you recover your debt as quickly as possible.
In the first of our four-part guide, we outline step one of the process: Letter before Action
If a company has failed to pay your invoice, contact them to check that they’ve received your ‘statement of account’ or copy invoice and whether there’s been an oversight. If they still fail to respond despite confirming receipt, then it’s time to send a Letter before Action.
Address the letter to the debtor company’s registered office and mark for the attention of the company’s director, using their name as the reference number.
The letter must be formal and clear, including:
- Your name and address
- The reason for your claim (outstanding debt)
- What you require from the debtor or debtor company to resolve the matter
- The amount which is outstanding/being claimed
- A list of documents that you are enclosing with your letter such as copy invoice or statement of account
- The date when you want a response or payment by – this is usually within seven days but can sometimes be 14.
- A statement that if no response or payment is received then court proceedings will start
Always send your Letter before Action via post and email.
Remember that if you are writing to a debtor that is an individual, you will need to follow the new debt protocol rules that came into place on 1st October 2017 as there are additional documents that now need to be enclosed with your letter.
For maximum impact, also consider asking a specialist third party or law firm to send a letter on your behalf. The Debt Collection Centre can help by sending an initial legal letter on a no-collection, no-fee basis. As the letter is from city solicitors, this sends a powerful message to a debtor that the debt must be paid immediately.
Keep an eye on our website for part two of our guide, which will advise you on what to do if there’s no response to your Letter Before Action.
For further information or advice, please contact us.