30th March 2020
The Covid-19 crisis has created the fastest economic shock in history and many business owners are feeling the pressure of the uncertain times ahead.
The coronavirus pandemic has quickly changed the way that we are able to work and run companies, with many UK businesses having to close up shop temporarily.
Whilst there is still much to be determined and we await further government guidance, we do know that now is a time where businesses want to be as financially secure as possible.
One task that you or your finance departments should make a priority (from the comfort of their homes) is to recover as much debt as possible.
Firstly, because it is best to recover debts now in case businesses become un-contactable in the event of a total lockdown and secondly, in the sad circumstances that your debtors become unable to pay in the weeks or months to come.
Tidy up your cashflow
Get your accounts up-to-date by paying off any outstanding bills and invoices you have. This will help you to see a clear picture of your business’s financial strength.
Chase Owed Debts
Ensure that you have sent out bills or requested payment from all work carried out to date. Don’t be afraid to chase late invoices. Times are difficult for many businesses at the moment but that doesn’t mean that your business should go unpaid for work that has been agreed to.
If you usually bill at the end of each month, now may be the time to introduce weekly or even daily billing in order to improve and shorten your cashflow.
Highlight Bad Payers
Most businesses will have customers that appear to drag their feet when it comes to paying bills. There may be good reason for this but, of course, there will be those who are just poor payers. Put these clients onto a separate list and devise a strategy to improve them. Perhaps you need a face-to-face meeting, need to offer them different payment terms or set up a monthly billing system with them? You may be unable to action these points now whilst the UK is operating under lock-down but this is something to be aware of and revisit when normality returns.
Do you have any major outlays coming your way? Can you account for these now or ring-fence the funds? Are there any ways you can save on expenditure or contracts that you can pause for the coming months whilst your business recovers?
The Government has outlined several ways that it will be supporting the UK business economy amid the coronavirus crisis. We would suggest checking your entitlements to these benefits and looking into how you go about claiming them asap, keeping an ear close to the ground for further updates, guidelines and support.
There is support for employers with the coronavirus worker retention scheme, grants for small businesses, help for leisure businesses and breaks for commercial property rent.
Now may be a prevalent time to speak to your business bank manager, accountant, lawyer or other advisors that you rely on to check that you are maximising the help available for your business.
When gentle reminders, payment plan offers or more forceful letters to your business debtors have failed to recover debts owed to your or your business, then you may need to take more serious action.
Contact our Dispute Resolution Team to see how we can help your business to persist during these tricky times.
Taking legal action doesn’t have to mark the end of a business relationship or see you attending intimidating court hearings. There are many different routes to take and in many cases a letter from a solicitor can be the nudge businesses need to clear their outstanding balances and start to engage with you.
When things are not so straight-forward we can provide a more comprehensive service, offering mediation, arbitration or court proceedings on your behalf.
Our legal experts continue to work safely and remotely in order to continue to support our clients and local business community.
Call us on 01256 844888, email firstname.lastname@example.org or speak to our online chat assistant who is available 24/7 via our website.
We are all in this together and hope to be able to help you seek justice, regain trust and retain your business in these unprecedented times.
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The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.
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