Dealing with a bad payer
Discussion
I have sent goods to a bad payer and need to draw up an agreement to pay off this order over 12 months.
The easy answer is collect the goods and don't deal with them etc etc but I'm willing to take the chance.
What should I put in the agreement? I want to take a fixed amount each month whats the best way to do this they are currently (not) paying by bacs.
I want to add some bits into the agreement that will make them think twice about missing payments but not sure what ammo I might have? For sole traders we get home addresses which normally bad payers don't like giving out - anything like that I can do?
It's a limited company.
The easy answer is collect the goods and don't deal with them etc etc but I'm willing to take the chance.
What should I put in the agreement? I want to take a fixed amount each month whats the best way to do this they are currently (not) paying by bacs.
I want to add some bits into the agreement that will make them think twice about missing payments but not sure what ammo I might have? For sole traders we get home addresses which normally bad payers don't like giving out - anything like that I can do?
It's a limited company.
If you really want to go down that route get it drawn up by a lawyer.
I would be more worried about the fact it would become the norm for ongoing orders.
I would also be concerned that if they can't pay this then the likelihood of them going pop is quite high. I would be wanting all or a significant percentage of what is owing now. I would also add interest charges to the payments.
I would be more worried about the fact it would become the norm for ongoing orders.
I would also be concerned that if they can't pay this then the likelihood of them going pop is quite high. I would be wanting all or a significant percentage of what is owing now. I would also add interest charges to the payments.
Let's read this again:
Your brain is giving you lots of reasons to be sensible, don't override it
VEIGHT said:
I don't really want to end the relationship just yet it's a good ongoing account.
No it isn't, they're bad payers. Whatever happened in the past is past.VEIGHT said:
I know the easy answer is to collect the goods however I'm willing to take the risk.
You want to take a high-risk difficult answer that will last (at least) a year when you can take a quick easy answer. OK...VEIGHT said:
It will end badly I know and is going to be a PITA...
Yes and yes.VEIGHT said:
Just want a watertight agreement...
Stop giving them slack. The more you give the more they will exploit your good nature.Your brain is giving you lots of reasons to be sensible, don't override it
VEIGHT said:
I want to add some bits into the agreement that will make them think twice about missing payments but not sure what ammo I might have? For sole traders we get home addresses which normally bad payers don't like giving out - anything like that I can do?
It's a limited company.
Then you need to get a personal guarantee from a Director. Not watertight but if they're players who do it a lot then it'll put you at the forefront of their mind when making payments It's a limited company.
Speak to Col at www.matrixlegal.co.uk, he has lots of experience in this sort of thing, saved me a couple of Grand last year on a bad payer.
VEIGHT said:
Cost to the business about £4k.
I don't know how much £4k is worth to your business.I wrote off a £30k debt, had a cast iron case and I am 95% sure the business would have won but wasn't worth the ball ache to get the money. When you add up the effort in time + the distraction it would have caused + the publicity etc it wasn't worth it.
I believe the accountant offset the bad debt against profit so it reduces your tax liability if you are in the black.
VEIGHT said:
I'm willing to risk it - just want as much on my side now for when the s
t hits the fan!
The only thing which really matters is the contract, not your actions now. See below. t hits the fan!VEIGHT said:
I'll speak to a commercial lawyer but guess their costs will mean I'll just draft something in house!
What do you need drafting exactly? You quoted clearly for the goods and services stating what you would and would not deliver. You have a PO or some other mechanisum of confirmation of an order. You have proof of delivery (a note, acceptance or whatever). You have asked for the money (invoice). I assume the invoice is not disputed? Ask for the money or a plan. Set timescales and deadlines. Set expectations on next steps. Wait. Persue or write it off when they don't pay.
Or have I missed somthing like the magical ability for a solicitors letter to enable a non paying client to grow a tree with £4k on it?
Many thanks for your help with this everyone, you are right I need to tighten things up and don't have time to be playing games with companies like this.
Ok I've decided to take the goods back. Can you help me with my options? I have (for example) a display stand of sun tan lotions in 3 of their shops. Some are a good days travel away. I will need to send one of my guys to collect as if I ask a courier they might get damaged.
Do I:
1- call the directer and say sorry but we ave decided not to go ahead with the plan and will be collecting on XYZ date.
2- bypass the director and call the shops and explain that it will be collected on XYZ date
3 - just turn up and collect unannounced.
My worry now if that he will hold back giving me the goods which is a pain however I would then just go small claims route.
I will credit the stock if I get it back and go small claims for the stuff they have sold.
Thanks for changing my mind
Ok I've decided to take the goods back. Can you help me with my options? I have (for example) a display stand of sun tan lotions in 3 of their shops. Some are a good days travel away. I will need to send one of my guys to collect as if I ask a courier they might get damaged.
Do I:
1- call the directer and say sorry but we ave decided not to go ahead with the plan and will be collecting on XYZ date.
2- bypass the director and call the shops and explain that it will be collected on XYZ date
3 - just turn up and collect unannounced.
My worry now if that he will hold back giving me the goods which is a pain however I would then just go small claims route.
I will credit the stock if I get it back and go small claims for the stuff they have sold.
Thanks for changing my mind
If you are having to waste 3 days of your time and the cost of getting there and back and then the hassle of actually getting the goods when you are there you have way too much patience!
You've then still got the hassle of getting paid for the items you can't recover.
I would just go to moneyclaim and fill in a claim. 10 minutes, done.
You've then still got the hassle of getting paid for the items you can't recover.
I would just go to moneyclaim and fill in a claim. 10 minutes, done.
Just 'sort of' dealt with a bad debt. Sent a 7 day letter, got paid 1/3 straight off, rest to follow within agreed timescale (given in writing - for what that's worth). At least they seem to be communicating now.
Shout up and don't give in. I personally would not have gone there to pick the stuff up
Shout up and don't give in. I personally would not have gone there to pick the stuff up
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