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Dealing with Late Payments – Top Tips for Tradesmen

late payments

Is there anything worse than finishing a job and not being paid on time? This is a serious problem in the industry and even worse for those who are self-employed. If employees at an organisation were paid days, weeks or even months late, there would be chaos. So why is it brushed off in the home improvement sector as normal?

Tips to avoid late payment:

 

Establish clear payment terms and deadlines before beginning the work

Make sure you state an exact due date for payment as opposed to ‘due in x number of weeks’. It is also a good idea to include a late payment policy. This combined will hopefully reiterate the importance of being paid on time to your customer. Whilst 60/90-day payment terms are common, don’t just follow the crowd, set payment terms to meet your cashflow. Pick a timeline that is suitable to you.

Additionally, why not explore the option of early payment incentives and late payment penalties?

Triple check your invoice

Have you missed something? If there is any missing information, then the customer may be waiting to hear from you rather than confronting you themselves. Click here to view a guide provided by Xero that walks you through the process of making an invoice – you can check that you haven’t missed off any of these steps and act accordingly if you have.

Make it easy for customers to pay

Everyone has a preferred method when it comes to paying, so have you thought about offering cheque payment and online payment? The customer has a choice then and no excuses.

Considering we now live in a digital world; a further consideration would be to explore the options of automation in invoicing and following up payments.

Three of the most popular accounting solutions are QuickBooks, Xero and Sage – check them out and see what could work best for you and your business.

Communicate regularly

We’re all human and most of us have a brain that’s working a mile a minute; meaning that important information sometimes slips our minds. To avoid this being your payment information that is forgotten, make sure you communicate regularly with your customer in the run up to their payment due date. You could do this by sending a friendly reminder in the week/s running up to the deadline date either by letter, email or even phone call, whichever way you normally work.

What to do if your payments are still being missed, despite doing all the above


Chase immediately

Make sure you call your customer when chasing payment. Some do not check their emails every day and for those who do, it is easy for them to leave your email unanswered.

Keep your cool

As difficult as it may be sometimes, keep your cool. Try to compose yourself before speaking with clients, no matter how frustrated you may feel. Doing so ensures you don’t damage the relationship with your client and/or your reputation. Payment is likely to be received quicker if you are polite as opposed to aggressive.

No matter how tempting this might be, trust us, it doesn’t end well.

Act

If persistence and politeness still isn’t budging your client, then it may be time to act. Not sure where to start? Take a look at the Government’s business support website; or call their helpline as a first resort. They are accessible Monday – Friday from 9am to 6pm on 0300 456 3565.

Finally, don’t forget that as a contractor you have a statutory right to claim interest from clients who don’t pay their bills on time, thanks to The Late Payment of Commercial Debts (Interest) Act. 

Apple Panels Enter into Creditors Voluntary Liquidation

Apple Panel in Liquidation

It was announced on Wednesday 19th December 2018, that Apple Panels Ltd is beginning the process to enter into Creditors Voluntary Liquidation (CVL). They will cease to trade with immediate effect.

We understand this is unwelcome news, especially at this time of year.

Apple has stated on their website that Quantuma LLP will be handling the CVL, and they may be able to provide further information and can be contacted 02380 336464.

Update of 25/01/2019 from Quantuma LLP:

“I would advise that a sale of the business and assets of the Company, including the customer contracts, was completed on 23 January 2019. The purchaser is County Windows (Winchester) Limited.

County Windows (Winchester) Limited will work to honour as many of the contracts wherever possible.

If you have been contacted by any other party, purporting to have taken over the business of Apple Panels Limited or Apple Home Improvements, please be advised that this is not correct and they are not acting with authority of the Joint Administrators (Simon Campbell and Andrew Watling).”

Below is the statement on the Apple Panels Ltd website:

Apple Panels Ltd are sorry to announce that due to the current economic climate and a number of exceptional issues that have arisen during trading over the last 18 months the Director is taking steps to place the Company into Liquidation (Creditors Voluntary Liquidation) and will cease trading with immediate effect.

We appreciate that this will, unfortunately, result in a number of staff, sub-contractors, customers and suppliers being let down at what can be a difficult time of year. For customers who have queries in regard to the warranty on their installations, or have questions concerning a current contract, we recommend you contact either the Independent Insurance Backed Guarantee company (if this was included with the purchase of your contract) or the finance lender if Apple introduced you to the lender.

We will await more information regarding this matter and update this blog accordingly. There are still many scenarios which could impact this situation and we await further information. It is incredibly disappointing to have to publish this statement, especially at such a sensitive time of the year. We hope to provide more clarity in the coming weeks and thank you in advance for your patience in this matter.

More information on your statutory rights:

Chargeback

If you have paid a deposit on your full works in the last 120 days and your merchant has ceased to trade, you can ask your card provider to try and claw back the money you’ve paid via a Chargeback.
A chargeback is not enshrined in law, it is a part of the Scheme Rules that participating banks subscribe to. We recommend you give your bank a call to discuss this option. Note: there does need to be money in the merchants account for the clawback to go ahead.

Finance

If you purchased your windows/doors/conservatory through a finance lender (not via a personal loan you have arranged), and you have an issue with the product or workmanship, then under Section 75 of the 1974 Consumer Credit Act (CCA) you are entitled to claim directly via your finance lender.
If you feel you were mis-sold and you have substantive evidence to prove grounds of mis-selling, you can make a claim via your finance lender under Section 56 of the 1974 Consumer Credit Act.

Please check your paperwork for your specific finance lender and contact them directly.

For more information on your rights please take a look at:
https://www.which.co.uk/consumer-rights/regulation/section-75-of-the-consumer-credit-act