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Tackling big companies who owe you money

Despite having a huge turnover and good cash flow, many large companies persistently fail to pay suppliers on time. So, how do you chase a debt effectively when you’re dealing with big business?

There’s nothing more frustrating that not getting paid in a timely fashion by a multi-million-pound corporation. If this is a challenge you face on a regular basis, you’re not alone. According to analysis of UK Government data by the Chartered Institute of Procurement & Supply (CIPS), one in four invoices received by large businesses are paid late and there’s been only a slight reduction in the number of late payments over the last five years.

Why are some big companies reluctant to pay their bills?

In some cases, it simply comes down to admin issues, for example purchase orders haven’t been properly raised, there’s a backlog in the bought ledger department or there’s a query regarding the order that hasn’t been resolved. However, there can be a deliberate policy of late payment. It’s often driven by a power dynamic that attempts to exploit the supplier’s goodwill and their eagerness to trade with a major player in the marketplace.

So, what’s the right approach?

Contact the right person

There’s no point in wasting your time chasing someone who doesn’t have the authority to expedite your payment. Make sure you have a key contact, whether that’s a finance decision maker or someone who has the power to escalate the issue.

Set the ground rules

You’ll have a much stronger case if you’ve covered things off from the get-go. Make sure you’ve agreed trading terms in writing and that you’ve obtained properly drafted purchase orders.

It’s also wise to think ahead and allow for the possibility of payment being delayed. Make sure you have a paper trail, which will be essential if you have to take enforcement action. Keep key information on file, such as the customer’s bank account details in case you need to apply for a third-party debt order and addresses where stock and assets are stored in case you need to instruct High Court Enforcement Officers.

Don’t be afraid to chase

It’s important not to be reticent or to feel intimated by the size of the company you’re dealing with. Stake your claim firmly – chasing an overdue invoice is a perfectly legitimate business practice and you’re entitled to expect to be paid for work you’ve done on the terms agreed.

What leverage do you have?

How important is the trading relationship to your customer? Would they struggle to find another supplier who can offer them comparable service at a competitive price? If you withdraw future services, will that compromise their own customer relationships? It’s important to know how strong your negotiating position is and where the red lines are.

You shouldn’t just accept late payments as a necessary evil. You deserve to be treated fairly and paid in a timely fashion for work you’ve done on time and in good faith. Therefore, it’s important to do everything you can to expedite payment, whether that’s through proactive debt management or robust credit control.

You don’t have to go it alone

If you’re struggling to chase a debt effectively, it could be time to get expert help from a professional debt collection agency. Our team are experts in debt collection and debt management. We have a strong track record of success in dealing with all types and sizes of business. We also understand the importance of tenacity and attention to detail when dealing with major corporations.

With a persistent but professional approach, Redwood Collections can achieve positive results without impacting on your valuable customer relationships, helping your business Grow Stronger.

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