In the fast-paced world of business, maintaining a steady cash flow is crucial for success. However, when clients delay payments, it can severely impact your ability to reinvest and grow. Many businesses try to handle debt recovery on their own, but this often leads to missed opportunities for financial restitution and added stress. Here's why involving a lawyer can make a significant difference.
Missed financial opportunities
Late payment interest and statutory penalties: When you don't use a lawyer, you may miss out on claiming late payment interest and statutory penalties. Under the Late Payment of Commercial Debts Act, creditors can recover interest at 8% above the base rate. Additionally, businesses can claim between £40-£100 for each overdue invoice. This not only compensates for the delay but also serves as a deterrent against future late payments.
Impact on business cash flow
Cash flow disruption: Many creditors are content just to recover the principal debt. However, delays in payment disrupt your business's cash flow. Funds that could be used for reinvestment are tied up, hampering growth and operational efficiency. Had these payments been made on time, they could have been accruing interest in your bank account, further increasing your financial stability.
Hidden costs of self-recovery
Time and administrative costs: Chasing late payments internally incurs hidden costs. The time and resources spent on pursuing debtors can be significant, diverting attention from core business activities. The statutory penalties available through legal recovery are designed to compensate for this loss of time and effort, which is often overlooked when handling debt recovery without professional help.
Stress-free debt recovery
Hands-off and efficient: Entrusting a lawyer with your debt recovery process offers a stress-free solution. Our expertise ensures that all legal avenues are explored, maximising your recovery while allowing you to focus on running your business. As we often say, "We do the hard work, so you don't have to."
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.