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Don’t Be Too Proud to Seek Help on Late Payments

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In Charise Marsden’s experience, late payment can often boil down to misplaced pride; a company suffering cash flow issues and too proud to admit it’s got a problem. It follows that firms shouldn’t be too proud to seek assistance when a customer is failing to cough up what’s owed.

Charise Marsden“You do find businesses that are genuinely struggling – maybe somebody has not paid them – but instead of being upfront and honest with their customers, they bury their head in the sand, say the payment has been sent, use every excuse in the book as a delaying tactic,” says Charise, who is debt recovery manager at law firm hlw Keeble Hawson LLP who provide the FMB’s debt recovery helpline.

This is business, of course, so no sympathy is a natural response; so too might be a sense of frustration. But it’s important to keep a level head. The temptation to leap into court proceedings may be strong, but litigation is expensive and in matters of nondisputed payments owed, it is the most expensive way to recovering monies outstanding. Often, it’s not necessary either.

As with so many aspects of business, communication is critical to a resolution. This is where firms such as hlw Keeble Hawson come into play, says Charise; when companies are prevaricating, they can facilitate a resolution that works for both parties.

hlw Keeble Hawson’s debt recovery team offers a ‘no recovery, no fee’ service, tailored to the client’s individual requirements. The emphasis is on achieving a resolution at the pre-legal stage. That is, before the courts and – possibly – enforcement actions become a requirement.

The team try and identify the whys and wherefores of a company not paying, advising and discussing the matter with the client, and getting in contact with the debtor. Letters, and follow up phone calls, are often enough to prompt negotiations for a resolution satisfactory to the client.

“If it is identified as a straightforward debt recovery matter with no disputes, we’ll advise the client and provide a letter to the debtor on their behalf,” says Charise. “The majority of the time we do succeed in coming to some kind of arrangement, whether it is allowing them a bit more time in respect of raising the monies, or putting in place some kind of repayment plan, which is beneficial to the client, but also to their customer,” says Charise.

Of course, it’s not always the case that a matter can be resolved pre-legal. Sometimes a debtor still plays hard to get; on other occasions the payment is disputed. Sometimes, Charise says, referring the matter to hlw Keeble Hawson’s legal team – or advising a client to otherwise seek legal assistance – isn’t always avoidable.

On such occasions, some cold, hard calculations must come into play; does the debt outstanding make it worth the costs involved in recovering? Ultimately, that’s another business decision – recoup or write it off.

When it comes to litigation, though, evidence is a musthave; Charise is keen to stress the importance of building firms keeping up-to-date records.

“There are still a lot of day-today builders that work on the idea that a handshake will do – and we stress that everything must be in writing,” she says. “That is the key for doing business. If anything is agreed, if anything is amended, always put it in writing, because if it does come to a point where somebody like our firm needs to be instructed, it’s a lot easier to bring the matter to a successful conclusion where something is in writing as opposed to a verbal agreement.”

hlw Keeble Hawson’s pre-legal debt recovery service is offered through the FMB’s member services. For members facing payment – or indeed any other – issues, the FMB is there to provide support, advice, and guidance to its members, either directly or via agreements with third party bodies.

The article was first published in FMB and Housing magazines.

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