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The cheque’s in the post

Feb 17, 2015
If there were such a thing as a top-ten chart of business lies ‘the cheque’s in the post’ would almost certainly be number one. By David Jordan.


Everyone in business has to chase money sometimes and although we all need a nudge from time-to-time, deliberately withholding payment without good reason is bad business for both debtor and creditor.  Bad for the creditor’s cash flow and bad for the debtor’s reputation and future business relationship with the supplier.  Despite this there are many who still hold onto their supplier’s money until the bailiffs are about to bang on the door and demand ‘cash or goods to the value’.  

With interest rates at an all-time low, being a bad payer makes even less sense than it did in the days when money held on deposit provided an extra revenue stream.  To make slow paying even less attractive, in 1998 the government introduced late payment legislation whereby companies who don’t pay within 30 days of an invoice or when the service or goods were delivered are legally liable to pay a surcharge for every day the debt remains unpaid, based on an annual rate of 8% + bank base rate.  Debt collection agencies will also charge a compensation fee of around £50 - £120 depending on the amount of the debt.  So paying late just doesn’t make sense, even if you’re running an overdraft.

Putting a debt in the hands of a debt collection agency is of course a last resort and most reasonable companies will do everything they can to help a creditor who is in genuine financial difficulties.  What they won’t stand for is being lied to or being told that the product or service was not up to scratch, months after the transaction took place, just to avoid payment.

Money is one thing, reputation is another and no one can afford to be marked as a delinquent payer, especially in the removals business. Ours is a relatively small industry and news travels fast.  People talk in the bar at international conferences, at trade shows and on the golf course, as well as in everyday business conversations.  A good reputation that took years to earn can be destroyed in an instant.

Here at The Mover we’re in the fortunate position of having an excellent financial relationship with our customers.  We rely on advertising for our income and as a small company we need to keep a careful eye on our aged debtors list to keep the wheels turning and the magazine running off the press.  Occasionally of course we do have to ask our customers, politely, to settle their accounts and in the vast majority of cases they do.  However a handful don’t and it would be easy as a publisher and PR agency to blow the whistle on them.  So far we’ve resisted the temptation!

If you’re having problems collecting overdue accounts you could of course sue the debtor using the Small Claims Court, but even if you win the chances of getting your money are slim and you may need to employ a Bailiff to enforce the judgement.  A better approach - when all else fails - is to use a debt collection agency.  They will chase the debt for you and if the amount is below a certain figure – typically £3000 - they’ll take their fee from the late payment surcharge and compensation charges, so it won’t cost you a penny.

  • On a couple of occasions we’ve used a company called Direct Route Collections Ltd and I can recommend its services.  If you’d like more information call Justin Reilly on 01274 223190 or visit

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