Client not paying outstanding invoices - what options?

[Spudmaster]

Hi,
Long time lurker here, but hoping some of you might be able to advise.
I run my own business consultancy as a 1 man band working on various projects with various clients in the food industry. I have recently finished a 12 month contract as a GM for a business that is unofficially for sale. After 6 months, the owner and I started talking about the possibility of myself leading an MBO - something that I was very interested in. However, as I worked further with my advisers and backers, it soon became clear that his expectations and interpretation of the value of the business was miles off the real value of it / what we would consider paying.

Following an open (& friendly) discussion with the owner (10 months into the contract), we agreed that it would possibly be best if I did not renew my contract at the end of the 12 months. As such, I finished at the end of August on good terms.

The agreement I had was that I would invoice at the end of each month on 30 day terms.
I have been paid 10 of the 12 no problem. However, I now have 2 invoices outstanding with nothing to show. To date I have been polite and respectful having sent a number of emails asking if there is a problem / do we need to have a discussion - none of which have been responded to.

I have spoken to a couple of trusted former colleagues who have mentioned that all is still business as usual and that the owner has made no adverse reference to myself or my work.

So, what should I do next? I am planning on looking into the legal route next week; but before starting this process I thought I would see if anybody could shed light on similar experiences.

Any help much appreciated!
Spud

[anonymous-user]

Personally I would send polite weekly emails for a month or two after due date (larger clients take longer) then a couple of firmer phone calls. Failing that a letter informing a CCJ via moneyclaim.

Worth talking to them to find out root of the delay. A book keeper might be on holiday or similar.

Edited by anonymous-user on Friday 8th November 15:47

[Muzzer79]

Phone the owner, don't email.

If he directs you to accounts because it's an admin issue, phone them - don't email.

If still no response after another couple of weeks, legal letter.

[StevieBee]

Do all you can to physically speak to the chap. Even if this means turning up unannounced.

Failing that, a letter followed small claims.

[Terminator X]

You have been remarkably restrained! This is what I do - reminder email on due date if not already paid, gentle email reminder a few days later, direct phone call if it is a week late, go see them if 2 weeks late, set debt collectors on them if a month late.

TX.

[MOBB]

Cheap legal letter from Thomas Higgins usually wakes them up

[Spudmaster]

Thanks all,

To be fair, I have been restrained.
I will try calling on Monday; then daily. Arrive on site Friday if still no response.
I genuinely hope that it is an admin issue rather than zero intention of paying in his part. If the latter, then he is being rather naive as my consultancy services would undoubtedly come in handy to the handful of competitors who will no doubt be looking into acquisition once the IM is published in January....

Thanks again

[T5R+]

Hi Spud.

He has possibly played the classic "30-days make a stuffing for 60days" ie you work the last 2 months at risk when on a 30day payment cycle.ie Month 11 is due payment at the end of month 12 BUT you have already worked month 12 before invoicing month 12 thus 2 months exposure. What can be even worse - if you self pay and subsequently invoice expenses eg hotels, foods, mileage, etc as this is out of your own (business) money.

Do not let friendship or seemingly good relationships cloud your business decision. Are HMRC happy to wait when example your CT or VAT due date falls.

Your accountant may already have a friendly legal professional who is versed in these matters. Alternatively, make it formal/legal at the first opportunity.

May sound harsh but deep down you know it is the correct path. Best of luck.

[uzziwozzi]

You simply have to get legal advice.

A friend of mine ended up with 10 outstanding invoices and as a contractor it really dented on expenses.

It ended up in court and he reclaimed the costs as there was a written contract

All the best mate

[Macneil]

So he's paid you while he thought that there was a chance you would buy his business...now he knows that you aren't going to, he's not throwing what he sees as good money after bad. Wake up, smell the real nature of your relationship, 7 day letter then legal action with no further ado.