Options if you are owed money
It can be very difficult for small businesses to know what options are available when their customers owe them money. This can arise when business owners are uncomfortable chasing a debt for fear of upsetting their customer and losing valuable business.
The Government has been working to tackle this issue as nearly a quarter of UK businesses report that late payments are a threat to their survival.
After a business has continued to chase payment unsuccessfully, there are a number of options available. This includes: using a mediation service, initiating court action, sending a statutory demand or registering a claim to money from a bankrupt person or company.
Using a mediation service can help two sides find a solution to a dispute, and is usually cheaper and less stressful than going to court. The fee for using mediation is usually based on how much is owed. If mediation doesn’t work, you can still take a case to court.
A court claim can be made online if the money owed is less than £100,000 and owed by no more than two people or two organisations.
You can also use a statutory demand to ask for money you’re owed from a person or business. This can result in making an individual bankrupt or forcing a company into liquidation. It is important to be aware that any legal process can take many months, and there is no guarantee that you will get your money back whilst incurring additional costs.