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[ Focus: Debt recovery ]

cessation of work in the event of non payment. 4. Do not delay in submitting your applications for payment, or in rendering invoices as and when you are entitled to do so. If you delay this process, then you are providing free additional credit. 5. Have a credit management strategy in place. It does not have to be a complex system – what works for you is just fi ne, but it is imperative that whatever system you have it is applied across the board and is strictly adhered to. Customers can make enough excuses for themselves without you offering them any additional help in this department! 6. Always ensure that your credit management strategy provides for escalation in the process and not for repetition. Every step should set out a requested course of action, a timeline for compliance and a consequence for failing to do so. 7. In all your dealings with a customer, say what you mean and mean what you say. In circumstances where debtors are playing customers off against each other, it is the creditor who shows weakness that is likely to be left waiting for payment. Debtors do ‘rob Peter to pay Paul’. Do you want to be Paul or Peter? 8. Do not be afraid to ask for payment. It is your money and you are entitled to ask for it – and asking for payment does not have to be confrontational. We have in the past come across businesses that have employed credit controllers who did not like making telephone calls asking to be paid. Normally in this world, if you don’t ask you won’t get! 9. Please review your sub contracts. Increasingly, many contracts are providing that all matters in dispute must be

We may not necessarily always tell you what you would like to hear, but we will always tell you what you need to know

resolved by way of adjudication or arbitration. Judicial case law has recently begun to interpret such clauses strictly, so that straightforward claims for non payment for work done are being considered to be ‘disputes’ within the meaning of the clause – preventing the relatively low-value costs option of pursuing an unpaid debt via the county courts. Many main contractors are fi nding what are, in reality, nominal disputes and are using such clauses to force sub contractors down this path, or to negotiate reduced settlements given the cost and expense of utilising the other methods of dispute resolution. 10. Always try to ensure you have in place a mechanism for establishing the date of issue of the Certifi cate of Making Good Defects, and for tracking the dates when retentions fall due. Giving the main contractor written notice three months, one month and one week before the retentions fall due, will ensure that they cannot play the excuse that they were not aware that this was due for settlement, so seeking to delay the release of these funds.

About the author

Bob Partridge Bob Partridge is managing director of Effective Credit Collections Limited, and has been involved in the collection of commercial debt for more than 25 years. Effective Credit Collections Limited has provided the ECA’s debt collection service to registered members since 2002.

We hope these points represent a helpful aide mémoire for your business. Effective Credit Collections Limited are always ready to speak to members of the ECA and offer advice, whether formally or informally, if we can be of any assistance. Anyone who requires help with debts is urged to use the ECA’s debt collection scheme. We’re here to help you, and to offer our continuing support to all members of the association.

■ Call the ECA on 020 7313 4818 or visit for more details of the ECA’s Debt Recovery Service. Contact Effective Credit Collections Ltd on 01733 755001.

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