Discussion
Right now I feel like this ---> 
I've got a small company and I supply a large international company with a product, and have been for about 5 months. However, I have yet to be paid. They now owe me a 6 figure sum and I have no more money to put into my business to buy the products to sell on. Because I have almost no cashflow, I am unable to borrow from the bank as I have nothing to prove I will ever get paid. I really don't want to start going down the personal loan/credit card route if I can help it.
I have sent over 30 emails, and called various people. None of my emails are ever answered and when I call, I am fobbed off - "yes, you're on the next payment run" or "oh, right, we 'lost' your email address". It doesn't help that most of my contacts are on the other side of the World, so I'm having to get up at ridiculous hours to talk to them to try and get this all sorted out
I have called their accounts department on numerous occasions only to be told that they are "training", or "they don't take calls at this time, please try later" (and of course you try 'later' and they are unavailable due to any number of ludicrous reasons). I have left messages asking to me called back, but to no avail. Right now, I don't know what the problem with my account is - or even if a problem exists.
My accountant says that sending a solicitor's letter would probably not work and would be a waste of my money. However, I think this is the only route I can really go down. I'm worried about doing this because if I stop supplying them with goods, they'll find them elsewhere and I may never get orders from them again. However, sending them a solicitor's letter whilst you are still supplying goods seems a bit daft?
Does anyone have any other suggestions? I'm at the end of my tether. I'm talking to brick walls and I've exhausted every avenue I can think of. The stress of it all is starting to affect my health and I have no idea when I'm going to get a resolution. I am tempted to write to the VPs but not sure this will do any good. Can anyone recommend me a good solicitor or debt recovery firm? If I pay out for them, can I charge the money back to the customer?.
Between them and my bank (who took over 3 months to send me a debit card), I'm starting to understand why businesses go under!
Does anyone have any suggestions?
I've got a small company and I supply a large international company with a product, and have been for about 5 months. However, I have yet to be paid. They now owe me a 6 figure sum and I have no more money to put into my business to buy the products to sell on. Because I have almost no cashflow, I am unable to borrow from the bank as I have nothing to prove I will ever get paid. I really don't want to start going down the personal loan/credit card route if I can help it.
I have sent over 30 emails, and called various people. None of my emails are ever answered and when I call, I am fobbed off - "yes, you're on the next payment run" or "oh, right, we 'lost' your email address". It doesn't help that most of my contacts are on the other side of the World, so I'm having to get up at ridiculous hours to talk to them to try and get this all sorted out
I have called their accounts department on numerous occasions only to be told that they are "training", or "they don't take calls at this time, please try later" (and of course you try 'later' and they are unavailable due to any number of ludicrous reasons). I have left messages asking to me called back, but to no avail. Right now, I don't know what the problem with my account is - or even if a problem exists. My accountant says that sending a solicitor's letter would probably not work and would be a waste of my money. However, I think this is the only route I can really go down. I'm worried about doing this because if I stop supplying them with goods, they'll find them elsewhere and I may never get orders from them again. However, sending them a solicitor's letter whilst you are still supplying goods seems a bit daft?
Does anyone have any other suggestions? I'm at the end of my tether. I'm talking to brick walls and I've exhausted every avenue I can think of. The stress of it all is starting to affect my health and I have no idea when I'm going to get a resolution. I am tempted to write to the VPs but not sure this will do any good. Can anyone recommend me a good solicitor or debt recovery firm? If I pay out for them, can I charge the money back to the customer?.
Between them and my bank (who took over 3 months to send me a debit card
), I'm starting to understand why businesses go under! Does anyone have any suggestions?
Edited by aranell on Thursday 24th August 14:53
The bad news is that your business is probably screwed. Either they continue not to pay, and you run out of cash. Or you get the money from them and they refuse to buy any more stock from you. So first of all, accept that and deal with it.
Secondly, you have two options:
Is there likely to be any stock you can recover? You might consider just turning up with a van and a couple of stocky gents to remove it. Marginally legal, but may be appropriate.
Second, the Winding Up order. Get on to a solicitor now - get it drafted, and understand how it works. FYI, a friend had a similar problem with Tesco, and knew how to use the order. Payment arrived in 24 hours.
Secondly, you have two options:
Is there likely to be any stock you can recover? You might consider just turning up with a van and a couple of stocky gents to remove it. Marginally legal, but may be appropriate.
Second, the Winding Up order. Get on to a solicitor now - get it drafted, and understand how it works. FYI, a friend had a similar problem with Tesco, and knew how to use the order. Payment arrived in 24 hours.
Some questions first:
Who was your contract with? Is there a UK based legal entity or are all of your dealings with a non UK company? The answer to this affects what action you take next.
Do you have proper contract documentation to back up all of the money they owe you? and by this I mean PROPER - could you go to court and say here is the contract, this is what I delivered, here are my invoices, here are some of my chase up letters? The chase up letters are less of an issue but do you have the contract documentation in place?
Assuming you have proper contract documentation what do your docs say about payment terms - when under your documents should they have paid you?
Looking honestly at the situation do you think that there is a justifiable reason why they are not paying you? Did you deliver all of the goods, in the time frame agreed etc. etc.? This is important, don't fool yourself if there might be a problem.
Do you need their business in the future? Do they need you?
Give some more info and hopefully some of us can give you some decent advice. It does sound like a nasty situation.
Who was your contract with? Is there a UK based legal entity or are all of your dealings with a non UK company? The answer to this affects what action you take next.
Do you have proper contract documentation to back up all of the money they owe you? and by this I mean PROPER - could you go to court and say here is the contract, this is what I delivered, here are my invoices, here are some of my chase up letters? The chase up letters are less of an issue but do you have the contract documentation in place?
Assuming you have proper contract documentation what do your docs say about payment terms - when under your documents should they have paid you?
Looking honestly at the situation do you think that there is a justifiable reason why they are not paying you? Did you deliver all of the goods, in the time frame agreed etc. etc.? This is important, don't fool yourself if there might be a problem.
Do you need their business in the future? Do they need you?
Give some more info and hopefully some of us can give you some decent advice. It does sound like a nasty situation.
Do not carry out any more work for them until they have paid. As already said you have probably lost this business already due to a) They are in financial trouble and not able to pay. b)They are in trouble and already getting the parts elsewhere (spreading the debts) and eventually will be in financial trouble taking two companies with them.
Take them to court for the money they owe now before they do end up going under. If the company is big enough the chances that the buyer will know that you are giving the finance dept hell are slim.
Don't waste too much time on them you have to get new replacement business as priority number one. So I would focus on that.
PS. Happened to me 3 years ago. Not much you can do, it sucks and what is really annoying is when they start up again under new management wanting the same parts without paying the previous debts (which they won't have to). God business sucks sometimes.
Take them to court for the money they owe now before they do end up going under. If the company is big enough the chances that the buyer will know that you are giving the finance dept hell are slim.
Don't waste too much time on them you have to get new replacement business as priority number one. So I would focus on that.
PS. Happened to me 3 years ago. Not much you can do, it sucks and what is really annoying is when they start up again under new management wanting the same parts without paying the previous debts (which they won't have to). God business sucks sometimes.
After letting it already go on 5 months (how?) I suspect a few weeks is the least of his problems.
I'd
- phone & try & get through to someone (which I understand he has tried)
- fax
- phone again
- fax again, this time stating that legal action will be taken if not recieved within 7 days
- serve winding up order
- seek legal advice
Either the company is going to go tits on you which means the best you can hope for is probably 10% of your outstanding amount, or you may have to wait another couple of months (from when you went legal). Either way you're going to get more than you're currently getting.
I'd
- phone & try & get through to someone (which I understand he has tried)
- fax
- phone again
- fax again, this time stating that legal action will be taken if not recieved within 7 days
- serve winding up order
- seek legal advice
Either the company is going to go tits on you which means the best you can hope for is probably 10% of your outstanding amount, or you may have to wait another couple of months (from when you went legal). Either way you're going to get more than you're currently getting.
This all seems a bit odd. In my experience, 'large international' companies (especially publically quoted ones) are usually pretty good payers. They'll push you for extended terms etc, but they generally more or less adhere to them.
You have to follow their proceedures etc, but I've never been messed around to anything like the extent you get with smaller company's.
Who is the person actually giving you the PO's? You might not want to bother the buyer, but purchasing departments can often be very helpful in getting bills paid.
You have to follow their proceedures etc, but I've never been messed around to anything like the extent you get with smaller company's.
Who is the person actually giving you the PO's? You might not want to bother the buyer, but purchasing departments can often be very helpful in getting bills paid.
Having a similar problem at the moment although it is a 5 not 6 figure sum, went to the offices and waited for person in question, was lied to face to face and now have sent solicitors letter, ready to pursue legally. Makes you wonder why you bother sometimes, it seems the world is stacked against the smaller businessman, the bank don't give a sh*t so cannot even get short term OD facility to tide us over.
All I can offer is my sympathy, my solicitor is the one with the brains
All I can offer is my sympathy, my solicitor is the one with the brains
Feel free to contact me for some FREE advice. I will need to know more of the facts and take it from there. For very large sums we work on an agreed fee basis not a percentage. Most debt recovery companies will charge you at least 10%, our agreed fee will save you a substantial amount. For example if the debt is say £100,000 our agreed fee would be around £1,000 - £2,000 plus any agreed legal costs.
Edited by jamesuk28 on Thursday 24th August 17:14
Firstly, thank you everyone for the replies - it's made me feel a lot better 
OK, to answer the questions:
Yes, the company is solvent and able to pay their bills. I suspect a paperwork problem or a communications problem internally. If I could get a response out of anyone, I'd know for sure!
I'll look into the Winding Up order...never heard of one of these before so I'll look at it later tonight.
My contract is actually from overseas, however I do deal with the UK branches. All contract documnetation is in place, including 45 day terms etc etc. I have invoices, emails, phone conversation notes...the lot. Everything has been delivered on time.
Yes, I need their business. There are not many people I can sell to. No, they don't need me. There are plenty of people who would love to have the contract I have!
Yes, I want more orders from them...it pays, what more can I say?!
I'm worried that factoring will eat into my profit margin too much. I have every confidence I *will* be paid, it's just a case of whether it will be on the next payment run (and pigs might fly) or whether it will be at Christmas, or worse!
I have gotten myself another name and number which I will call tomorrow...I'm praying that this will *finally* be the person that can sort all this out for me.
Thank you for all the PMs - it's much appreciated
Sarah
OK, to answer the questions:
Yes, the company is solvent and able to pay their bills. I suspect a paperwork problem or a communications problem internally. If I could get a response out of anyone, I'd know for sure!
I'll look into the Winding Up order...never heard of one of these before so I'll look at it later tonight.
My contract is actually from overseas, however I do deal with the UK branches. All contract documnetation is in place, including 45 day terms etc etc. I have invoices, emails, phone conversation notes...the lot. Everything has been delivered on time.
Yes, I need their business. There are not many people I can sell to. No, they don't need me. There are plenty of people who would love to have the contract I have!
Yes, I want more orders from them...it pays, what more can I say?!
I'm worried that factoring will eat into my profit margin too much. I have every confidence I *will* be paid, it's just a case of whether it will be on the next payment run (and pigs might fly) or whether it will be at Christmas, or worse!
I have gotten myself another name and number which I will call tomorrow...I'm praying that this will *finally* be the person that can sort all this out for me.
Thank you for all the PMs - it's much appreciated
Sarah
Edited by aranell on Thursday 24th August 20:10
Hi Sarah, have you managed to track them down on Companies house and found some director details from there if they have a UK company?
If you need their business you need to solve this without resorting to Winding up orders etc., you'll only put their backs up and they'll take their trade elsewhere.
Good luck, let us know how you get on with the new details?
If you need their business you need to solve this without resorting to Winding up orders etc., you'll only put their backs up and they'll take their trade elsewhere.
Good luck, let us know how you get on with the new details?
aranell said:
Firstly, thank you everyone for the replies - it's made me feel a lot better
OK, to answer the questions:
Yes, the company is solvent and able to pay their bills. I suspect a paperwork problem or a communications problem internally. If I could get a response out of anyone, I'd know for sure!
I'll look into the Winding Up order...never heard of one of these before so I'll look at it later tonight.
My contract is actually from overseas, however I do deal with the UK branches. All contract documnetation is in place, including 45 day terms etc etc. I have invoices, emails, phone conversation notes...the lot. Everything has been delivered on time.
Yes, I need their business. There are not many people I can sell to. No, they don't need me. There are plenty of people who would love to have the contract I have!
Yes, I want more orders from them...it pays, what more can I say?!
I'm worried that factoring will eat into my profit margin too much. I have every confidence I *will* be paid, it's just a case of whether it will be on the next payment run (and pigs might fly) or whether it will be at Christmas, or worse!
I have gotten myself another name and number which I will call tomorrow...I'm praying that this will *finally* be the person that can sort all this out for me.
Thank you for all the PMs - it's much appreciated
Sarah
OK, to answer the questions:
Yes, the company is solvent and able to pay their bills. I suspect a paperwork problem or a communications problem internally. If I could get a response out of anyone, I'd know for sure!
I'll look into the Winding Up order...never heard of one of these before so I'll look at it later tonight.
My contract is actually from overseas, however I do deal with the UK branches. All contract documnetation is in place, including 45 day terms etc etc. I have invoices, emails, phone conversation notes...the lot. Everything has been delivered on time.
Yes, I need their business. There are not many people I can sell to. No, they don't need me. There are plenty of people who would love to have the contract I have!
Yes, I want more orders from them...it pays, what more can I say?!
I'm worried that factoring will eat into my profit margin too much. I have every confidence I *will* be paid, it's just a case of whether it will be on the next payment run (and pigs might fly) or whether it will be at Christmas, or worse!
I have gotten myself another name and number which I will call tomorrow...I'm praying that this will *finally* be the person that can sort all this out for me.
Thank you for all the PMs - it's much appreciated
Sarah
Edited by aranell on Thursday 24th August 20:10
Just as a matter of interest what line of business are they in?
Edited by mogul on Thursday 24th August 21:25
Sarah
On another note, the importance of a contract has been mentioned a number of times. Obviously I don't know what you supply, but in my experience an official purchase order for work undertaken is probably more important as that can be used as a legally binding document.
We have several 'contracts' but all that does essentially is confirms the trading agreement between the two companies, but not (in our case) individual or ongoing orders. Every time we receive an order from anybody (albeit large or small company) we insist on a valid PO otherwise the job just doesn't happen. We keep copies of all PO's and paperwork and archive emails as a back up. A PO is a legal commitment from them to buy and providing you then supply as per your 'contract' or their T&C's on their PO you will have more clout should you need it.
A winding up order can be applied to any company owing you more than about (from memory)
£3000 and it may frighten them (probably won't though!). You are right to consider future business and assuming the company is a large blue chip they are very likely to pay you, but when they are ready or have been pushed hard enough. If you can weather the storm and carry on supplying then good luck. You have to be sure though that you have the cash to continue your day to day costs if they continue to prove difficult. I can't remember whilst writing this post - have they ever paid you?
In my experience (again!) credit control is the most difficult part of running a small business. Regardless of the fact that small companies should be paid on time (as per the governments instructions) it rarely happens and juggling cash is an everyday problem for most people. Talk to your bank, explain the situation but most of all talk to your customer and if neccessary talk to someone in authority. I'm also not trying to teach you to suck eggs but be calm and approach them in a positive rather than aggressive manner, there may be a perfectly reasonable answer to their slow payment.
On another note, the importance of a contract has been mentioned a number of times. Obviously I don't know what you supply, but in my experience an official purchase order for work undertaken is probably more important as that can be used as a legally binding document.
We have several 'contracts' but all that does essentially is confirms the trading agreement between the two companies, but not (in our case) individual or ongoing orders. Every time we receive an order from anybody (albeit large or small company) we insist on a valid PO otherwise the job just doesn't happen. We keep copies of all PO's and paperwork and archive emails as a back up. A PO is a legal commitment from them to buy and providing you then supply as per your 'contract' or their T&C's on their PO you will have more clout should you need it.
A winding up order can be applied to any company owing you more than about (from memory)
£3000 and it may frighten them (probably won't though!). You are right to consider future business and assuming the company is a large blue chip they are very likely to pay you, but when they are ready or have been pushed hard enough. If you can weather the storm and carry on supplying then good luck. You have to be sure though that you have the cash to continue your day to day costs if they continue to prove difficult. I can't remember whilst writing this post - have they ever paid you?
In my experience (again!) credit control is the most difficult part of running a small business. Regardless of the fact that small companies should be paid on time (as per the governments instructions) it rarely happens and juggling cash is an everyday problem for most people. Talk to your bank, explain the situation but most of all talk to your customer and if neccessary talk to someone in authority. I'm also not trying to teach you to suck eggs but be calm and approach them in a positive rather than aggressive manner, there may be a perfectly reasonable answer to their slow payment.
Edited by mogul on Thursday 24th August 21:51
mogul said:
Sarah
A winding up order can be applied to any company owing you more than about (from memory)
£3000 and it may frighten them (probably won't though
A winding up order can be applied to any company owing you more than about (from memory)
£3000 and it may frighten them (probably won't though
Edited by mogul on Thursday 24th August 21:51
A winding up order can be applied for on the back of a statutory demand - minimum liability is £750
rsvmilly said:
Plotloss said:
Factoring takes a while to set up its not an instant solution but could be an option if you have a few weeks.
Again, I guess it would depend on waterproof paperwork.Unfortunately factoring will not help in this situation. Recourse factoring throws the debt back to you after 3 months and non-recourse means you almost certainly won't be able to borrow against the invoices this old anyway.
I know it's too late for this advice now but if/when you pull through this it may help in the future. Never, ever expose yourself to debt that can ruin the cashflow of your company. Cashflow is the one thing that'll ruin you and to keep supplying a company that owes large sums over a long period is madness. I've been there before, pulled through it but learnt a very valuable lesson.
Anyway, back to your problem. Where are the company based? Do they have UK offices?
ETA: Have you considered credit insurance too? I could not sleep at night without it and it's very reasonably priced.
I noticed you're also interested in debt recovery companies - I'd avoid these like the plague if I were you - if you're interested in a decent, aggresive solicitors, mail me throuh my profile and I'll happily give you some contact details.
Edited by Carrera2 on Friday 25th August 08:54
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