Letter chasing payment before legal action
Late payment by customers is just one of the problems an accountant has to face. Fortunately, there is a way to wake up the people who owe you money, and get them to do something about it.
Last chance
Most businesses want to avoid costly and time-consuming litigation, so when you show them that you mean business they will most often pay up to avoid extra hassle. So a letter from you that looks like a formal legal notification of an impending lawsuit is a way of saying to your customer “this is your last chance”. Indeed these letters normally get passed to the owners of the business rather than the person who (misguidedly) thinks they are doing their employer a favour by not paying you.
It’s always best to keep such letters as simple as possible. You may have all sorts of issues involving your trading relationship that you would like to point out, but this is not the place for such a discussion.
There’s no official legal form which your chaser letter has to take. However, you need to include all the essential information such as: what the sale was (invoice reference and date), how much is owed, for how long, and your payment information. You then set a final deadline for payment. This can be any reasonable period from one week (it would be hard for payment to reach you in less than a week) to 30 days. Ten days is perfectly reasonable assuming you have already been waiting a long time for payment.
Using our Letter Chasing Payment Before Legal Action should help get slow/late payers back on track.
Related Topics
-
How much will you save with reduced scale charges?
HMRC has reduced the VAT fuel scale charge by nearly 6% for company-provided cars. When does the new reduced rate take effect and how do you make the calculations?
-
Avoid the trading allowance trap
In late 2024 you became self-employed. You’re now completing your tax return for 2024/25 and will claim the trading allowance instead of a tax deduction for business expenses. Could this impact your NI record and state pension entitlement?
-
Time off for fertility treatment?
A survey by Fertility Matters at Work has revealed that more than one-third of employees undergoing fertility treatment have resigned or are considering resigning because of the physical and emotional toll. Is there a right to time off for fertility treatment?
This website uses both its own and third-party cookies to analyze our services and navigation on our website in order to improve its contents (analytical purposes: measure visits and sources of web traffic). The legal basis is the consent of the user, except in the case of basic cookies, which are essential to navigate this website.