Help In Process In Dealing With Unpaid Invoice To Tradesman

[Cantthinkof12use]

Hi there, i have been a self employed tradesman for 2 years and am now needing some help in how to deal with an unpaid invoice.

I completed the work some 7 weeks ago which the customer is satisfied with, I sent an invoice giving 30 days to pay, this time has now lapsed and payment has not been made. 

I contacted the customer who said they will bring the payment to my house, they didn't turn up, and didn't respond to my subsequent phone calls.

I left it a few days and then I called round to the house, they said they were having cashflow problems and we agreed that they would pay in in weekly instalments and if I went back a couple of days later I would be paid the first instalment. I arrived as agreed but the customer had no payment, he assured me he would bring it round the following morning, again he didn't show, his phone is switched off.

So, what should I do now? Send a written reminder? Perhaps someone could suggest some suitable wording? I have been told I am within my rights to charge a daily interest rate of 8.5%, is this correct? How long do I charge this for before saying enough is enough? Any help would be much appreciated as I'm not sure what I am within my rights to say / do.

Thanks in advance

[Buenchico]

You calculate the interest as 8.5% per year (not per day!) but then divide by 365 to get the amount you can charge for each day that payment is overdue:
https://www.gov.uk/late-commercial-payments-interest-debt-recovery

It would seem likely, however, that you'll need to threaten (and possibly take) legal action. My post here explains the procedure:
http://www.theanswerbank.co.uk/Law/Question896197.html
(Ignore the bit about limited companies. Just address your demand to your customer).

[Cantthinkof12use]

Thanks for your response I'll certainly take a look at your link. Someone has suggested a debt recovery agency where they collect the debt on my behalf less a fee. What would be the difference between them and small claims court?

[kvalidir]

Don't use a Debt Recovery company, firstly it will cost you and secondly the customer will be more worried about you than them. If he's in the habit of not paying the he'll be well used to debt recovery letters and they really are toothless wonders anyway. Go the route Chris has suggested.

[DTCwordfan]

DTCwordfan
In your letter, state the interest rate and also include costs for legal action....send it recorded so it has to be signed for. I know it's annoying but one month overdue is not a lot.....I'd certainly word it to not be directly menacing but along the lines of "Failure to settle with me now will risk incurring interest at 8.5% calculated into a daily rate and administration and legal costs of the recovery court. I would also not want to take this to a debt recovery company but it is an option, as I am sure you wouldn't either."

[ToraToraTora]

yep, off to the small claims court, add on all interest and fees.

[thegreens]

Whilst other posts are the most helpful to try and get the money back, please remember this when dealing with your next clients. Get money up front as part of the deal, preferably the amount it has cost you in materials and then if the worst happens, at least you can pay for the materials and is only your labour that has not been paid for

[Cantthinkof12use]

So the customer now says he has paid me in cash. He has not and he knows it. If I go to small claims court how do I prove that he hasn't!

[Retrochic]

I think if you went to Smalls Claims they would tend to believe you rather than him. IF you had been paid cash why would you go to the bother of taking him to Court? There is a good chance he's done this before so he is probably worried in case it goes to court and its found he's done it again. Try and find out if he has and CCJ's against him (someone on here will know how to do that) and be very clear that this will go to Court unless he pays.

[Trotbot]

Do you normally issue receipts for cash payments? If it gets into a 'did he / didn't' he pay' argument, it would very helpful to explain this process and show no receipt was issued by reference to your copies and his lack of a receipt.

If you don't issue receipts, you probably should start doing so......