Following news that SMEs are using alternative funding methods to grow their businesses, Lovetts Plc, the debt recovery law firm, is urging small businesses to think just as carefully about who they use to recover their debts to support business growth over the coming year. “With business credit still hard to come by, we’re seeing businesses take legal action on late payments earlier than ever,” says Charles Wilson, Chairman of Lovetts. “Payment periods of up to 180 days continue to put the financial squeeze on SMEs, as large companies sit on an estimated £36.5bn owed to small firms in late payments. It’s therefore essential that businesses get the legal support and advice they need to recover their overdue debts in the most effective way.
“For a start, the latest SME Finance Monitor shows SMEs looking beyond the banks for their financing. We would suggest the same approach is taken when choosing a law firm to pursue claims for debts. Don’t just ask your usual Solicitor to take on this role, look outside the high street for dedicated and expert support.
“A good debt specialist firm will provide online access to the debts being chased, and their status, offering clear costs and reporting through online case management facilities. At Lovetts, for example, each client has a dedicated paralegal, this means there is one contact and they know that case – saving clients both time and stress. We have also just launched a new annual subscription service which means clients can get all the legal advice they need for a fixed cost, rather than watching the clock and racking up large bills.”
A specialist firm can help businesses with every aspect of late payments and credit management. Only with expert advice can SMEs make informed decisions regarding Letters Before Action and when to move a case forward to the claims court. But with ongoing support from paralegals and highly experienced solicitors, businesses can implement the best strategies on persistent late payers.
Charles Wilson concludes, “It’s great to see a more positive economic landscape emerging, and smaller businesses are a key part of this. Their growth is excellent news for the economy, but it must be backed up by strong credit management and cash-flow procedures in order to remain financially secure and provide the best chance at success in the future. Ensuring they have the best legal support in chasing up overdue payments is the first of many important steps to secure their future.”
What to look for in your legal eagles:
- Online visibility of debts being chased and their status with 24/7 access to documents
- Clear cost versus benefits reporting
- A dedicated contact for each client
- Ongoing support with credit management strategies from paralegals and in-depth advice from solicitors
- Advice on payment terms and conditions
- Application of Late Payment Interest and compensation where necessary
- Management of claims going to court
- Clear, strong strategies on persistent late payers
- A fixed price list for related expenses, offering clarity on fees and how they are charged, including packaged services, for effective budgeting
- Legal advice when you need it, at a fixed annual cost
** Source: http://www.telegraph.co.uk/finance/businessclub/9782988/Government-going-to-war-over-37bn-late-payments-to-small-companies.html