For small businesses, even a small financial problem can have a dramatic effect. One of the many financial issues that can occur for small businesses is late payments from clients or other businesses.
This is not an issue to be overlooked. Over 50% of small businesses in the UK are owed money from late payments. 20% of these businesses are owed more than a staggering £25,000. Labour leader Jeremy Corbyn has pledged to address the issue where big firms are the ones owing payment to small businesses.
Any small business could also be owed money from the bank. The PPI scandal has still left many businesses and individuals out of pocket for insurance they never agreed to in the first place.
Earlier this year, the Financial Conduct Authority announced that 29th August 2019 would be the deadline for reclaiming mis-sold PPI. Most of the large banks have been involved in the misselling of PPI and sold PPI to businesses, as well as individual consumers.
Make sure your business isn’t owed money. Here’s how you can claim back the money you are owed and ensure your business can stay financially stable.
Claiming Money from Clients and Businesses
It’s likely that you will have a charge for late payments on your contract or invoice with the client. However, this doesn’t always mean clients or businesses will pay on time. With any luck, follow-up letters and calls should bring the result you need. If not, legal action can be taken.
Here are the steps to take before legal action is needed and, if you need to, how to take legal action to claim your money.
- Make sure you have a clear record of all communication. This includes any terms and conditions stated about payment in a contract. If you don’t have enough paperwork with the agreed payment details, it will be more difficult to claim your money.
- If you don’t receive the payment on time, start with a gentle approach. Often, there can be a genuine reason why payment is late. Sending letters is the best way to start chasing the money. Don’t bombard a company or client and leave space in between sending each letter.
- If, after 30 days, you still haven’t received any communication, follow up with a phone call.
- If you have no response, the government recommends using mediation. The cost of using a mediator will depend on how much money is in dispute.
- If you still have no response or the client is refusing to pay, you can involve a solicitor or debt collection agency. If a solicitor contacts a client and mentions taking legal action, this can often cause the other party to pay.
- Court action may be necessary if the issue is not resolved from any of the above methods. The grounds for taking somebody to court over a lack of payment are: If the person doesn’t respond to your claim or if they acknowledge the payment but don’t pay. If the business or person has gone bankrupt, there is another protocol to follow.
If you decide to take legal action, it will cost your business money. This is why it is crucial to have all the paperwork and a record of all the ways you have tried to obtain money from the other party.
Claiming Back Money from the Bank
If you are owed money from the bank for mis-sold PPI, it is an easier process. Even if you don’t have the paperwork, you can still find out if you are due money. As long as you have basic information such as a name and contact details, you should be able to gain the rest of the information necessary.
Making a claim yourself can be done by contacting the bank or credit card provider. If you’re too busy or don’t want to handle the communication, contacting a PPI claims company can be worthwhile. Always check for a no win, no fee PPI claim deal and look for a company that offers a low service fee.
The money owed can make a huge difference to the finances of your business. With the newly imposed deadline, it’s important to start investigating now. The process can take many months or over a year if the case is referred to the financial ombudsman.
Kamran Mirshahi is the Director of Canary Claims. Since 2005, Kamran has helped thousands of people claim mis-sold PPI.