Web designer Frank Jonen has taken extreme action against his late-paying client, San Francisco-based gym chain Fitness SF.
Mr Jonen's web design firm has been working on the new Fitness SF website and brand identity for over six months; but he ultimately took the decision to replace their homepage with a simple text statement.
Read more: Frank Jonen Plays Hardball With Late Paying Fitness SF
The Institute of Credit Management (ICM) and business minister Michael Fallon have warned that it is "crazy" to fail to credit check new and existing customers.
Each month, the ICM publishes a new top tip to help safeguard small businesses' cash flow, and at the end of January its latest advice, written in collaboration with Mr Fallon, was released.
Many small businesses are caught out when clients refuse to pay their invoices. For a small startup, a handful of unpaid invoices can make the difference between a healthy bank balance and a full-on cash flow crisis.
When your non-paying client is located outside of the UK, unpaid invoices become even more of a headache. Chasing the debt yourself might be expensive, impractical and fruitless. If you’ve researched debt collection online, you’ll probably have noticed that there’s plenty of self-help when your client is in the UK - but if they’re overseas, there’s very little official advice on what you should do.
“A sale is not a sale until the money is in the bank”
A simple sentiment, but one that can often be lost in the thrill of securing that next big sale. But when the agreed upon payment day passes and you have no sign of the promised payment, what is the best way to go about securing the funds?
Read more: Chasing Payments - ICM & BIS Managing Cashflow Series Part Seven
If you extend credit to your customers you are effectively providing finance to them for the credit period.
If your business does not have the cashflow to support the credit it has extended you could be just one bad debt away from insolvency.
Read more: Factoring and Financing Options - ICM & BIS Managing Cashflow Series Part Six
The Daily and Sunday Telegraph have launched a series of articles reporting on late payments - and on the battle lines being drawn by those affected by and involved in settling overdue invoices.
In a Daily Telegraph report, for instance, Steve Sutherland - owner of architectural glazing specialist Dortech - is described as "putting his tin hat on" amid fears of a backlash from customers after he called time on a 13-year relationship with construction brand Balfour Beatty.
Read more: Late Payment Battle Lines Drawn, Reports Telegraph
Credit Insurance can be a valuable tool in a company’s credit control armoury and recent years have seen an explosion in availability of different types of cover.
From traditional Whole Turnover to Catastrophe or Single and Multi Buyer cover brokers can now offer a variety of policies to suit most businesses.
Read more: Credit Insurance - ICM & BIS Managing Cashflow Series Part Five
Will I get the money my company is owed?
But to answer this question first we need to understand exactly what is meant by the term insolvency, Sid Home our resident Credit Management expert explains.
