Unpaid Invoices & Paying Suppliers

[nlbhoy]

Hey Guys,

I'm looking for a bit of advice from anyone who may have been in similar situation, at one time or another.

I'm a one man band, I've been set up as a limited company since I started in 2015. I had been
doing a lot of work for a big contractor at the tail end of last year, I have outstanding invoices
totalling £6500 which I may never get (apparently this has happened before). This has put me
in a bad spot with one of my suppliers as I have outstanding invoices due to them for about £2800,
which I'm struggling to pay back anytime soon. I tried to work out a payment plan with them,
but they seem to have blanked the request, as I keep getting letters about taking me to court etc.

I'm looking for a little advice on how to proceed with this.

Thanks

 

[SparkyChick]

Invoice factoring may help in future, but I'm not sure you can factor an invoice you've already issued, I've got a friend in the business who I am hopefully seeing tomorrow morning, I'll make some enquiries.

For the now though, check your insurance. Some policies include cover against not getting paid I believe (certainly my policy does). Could be you could make a claim to cover the debt with your supplier. Is the supplier a big company, if it's a smaller company you may be able to appeal to the head honcho, could be you're dealing with jobsworth bean counters who are following policy to the letter.

As for the client... you say it's happened before... to you or have you heard through the grapevine they are bad at paying up, or is it just an administrative error? Maybe a letter to them threatening court action may work (depends I guess on whether you want to work form them again)?

 

[nlbhoy]

The supplier is Ross Electrical (newey & eyre) they've not been really helpful, to be honest.

I'll check my business insurance. Thanks

 

[sparkdog]

Maybe the FSB could give some advice or help if you were a member.
Or if you can get a loan or credit cards to clear it for the moment.

 

[SparkyChick]

Just another thought... what about having a chat with your bank? I don't expect you to divulge any details, but if you've not got one already an overdraft may help particularly if you go and see them and explain the situation. And the credit card idea from @sparkdog isn't such a bad one, there are normally good 0% deals on personal ones... use it to inject some capital into the business, your accountant may have some ideas too.

 

[PEG]

Hi bud,there are many,many details,the majority of,with respect,are your private business,which would affect the advice offered.

Things like,if you had any written contract with your debtor,are they still trading,reasons given for non payment,etc.
If the work was 3 or 4 months ago,have you been using the supplier for other work,since,and are they chasing for all or some.

If you are going to remain trading,do NOT ignore the legal aspects,tackle politely,head on.
Putting these to one side,even when you are fully in the right,will only allow the situation to develop,to a position where nobody will care about the original cause or any culpability.

With the utmost of respect,for your particular scenario,these issues run from the company holding out due to perfectly understandable,and legitimate reasons,right up to them being serial abusers of subbies...

You may find,a small amount of money spent gaining a specific legal advisers opinion,to be cash well spent.

If my legal expertise was sought after...i'd have softer hands,and more houses

 

[Octopus]

Why haven't you taken your customer to court over their non payment?

You should NEVER allow anyone to owe you such a sum when you are a sole trader......

 

[The Ghost]

Your creditors may be threatening to take you to court, however if the court sees you have made an offer to pay they will not take sanctions against you. If your debt is greater than your assets then techinically you are insolvent. That is a liquidity ratio of below 1:1. It is illegal to operate insolvent. Of course this is the loophole many people in your postion use! As maybe your debtors are or will! They go into liquidation then form a new business, not good I agree but it is part of the cut and thrust of the business world. Do you have an accountant? Ask them what your liquidity ratio is. Explain to your creditors they may force you into liquidation if they do not agree to a scheduled payment plan. They should understand they will get nothing if that is the case or perhaps a settlement of .05 p in the pound. In your position I would pay over what I can as and when I can. Regular payment of even £50.00 per month will stave off court action. Just do a BACS transfer to their account. It is a little known fact that there is not much the court can do about debt.
Get a debt collector onto recovering the money owed to you TODAY! do not delay. Factoring is probably not good in this case as the debt will still be on you, it will just be the bank as well as the wholesaler after their money.

 

[The Ghost]

It would be nice to know who your debtor is so none of us do work for them and get stiffed?

 

[ImpededLoop]

It would be nice to know who your debtor is so none of us do work for them and get stiffed?

Probably best to get the thread moved to the Arms section first. It could further jeopardise any possible payments if you're found to have been bad-mouthing the company on a public forum.

 

[rolyberkin]

I am fairly new to this but cannot understand how you could get that far up the creek and owe so much as a one man band, if the person/company is still solvent I would be getting online and filing a money claim online fairly sharpish.

https://www.moneyclaim.gov.uk/web/mcol/welcome

 

[rapparee]

In fairness £2800 isn't that much. I know of a sole trader who has £45,000 owed to him. His words to me were that he was too busy to chase it up. (I think I'd find the time)

If the supplier wants to try and put you out of business over this he'll never get his money back. The supplier should be ashamed of themselves, threatening legal action over a piddly amount such as this. You'll be able to pull the money back on new jobs going forward.

 

[7029 dave]

In fairness £2800 isn't that much. I know of a sole trader who has £45,000 owed to him. His words to me were that he was too busy to chase it up. (I think I'd find the time)

If the supplier wants to try and put you out of business over this he'll never get his money back. The supplier should be ashamed of themselves, threatening legal action over a piddly amount such as this. You'll be able to pull the money back on new jobs going forward.

Where you been hiding Rapp.?

 

[Leesparkykent]

Have you sat down with the branch manager and explained the situation? I got in to a little situation about 5 years ago and owed my wholesaler (which was/is a multi national)10K as I was knocked 28K and just chipped it down as much as I could over a few months or so.

 

[Risteard]

You should NEVER allow anyone to owe you such a sum when you are a sole trader......

He's not a sole trader - he said he has a limited company since 2015.