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nlbhoy

Hey Guys,

I'm looking for a bit of advice from anyone who may have been in similar situation, at one time or another.

I'm a one man band, I've been set up as a limited company since I started in 2015. I had been
doing a lot of work for a big contractor at the tail end of last year, I have outstanding invoices
totalling £6500 which I may never get (apparently this has happened before). This has put me
in a bad spot with one of my suppliers as I have outstanding invoices due to them for about £2800,
which I'm struggling to pay back anytime soon. I tried to work out a payment plan with them,
but they seem to have blanked the request, as I keep getting letters about taking me to court etc.

I'm looking for a little advice on how to proceed with this.

Thanks
 
Invoice factoring may help in future, but I'm not sure you can factor an invoice you've already issued, I've got a friend in the business who I am hopefully seeing tomorrow morning, I'll make some enquiries.

For the now though, check your insurance. Some policies include cover against not getting paid I believe (certainly my policy does). Could be you could make a claim to cover the debt with your supplier. Is the supplier a big company, if it's a smaller company you may be able to appeal to the head honcho, could be you're dealing with jobsworth bean counters who are following policy to the letter.

As for the client... you say it's happened before... to you or have you heard through the grapevine they are bad at paying up, or is it just an administrative error? Maybe a letter to them threatening court action may work (depends I guess on whether you want to work form them again)?
 
The supplier is Ross Electrical (newey & eyre) they've not been really helpful, to be honest.

I'll check my business insurance. Thanks
 
Just another thought... what about having a chat with your bank? I don't expect you to divulge any details, but if you've not got one already an overdraft may help particularly if you go and see them and explain the situation. And the credit card idea from @sparkdog isn't such a bad one, there are normally good 0% deals on personal ones... use it to inject some capital into the business, your accountant may have some ideas too.
 
Hi bud,there are many,many details,the majority of,with respect,are your private business,which would affect the advice offered.

Things like,if you had any written contract with your debtor,are they still trading,reasons given for non payment,etc.
If the work was 3 or 4 months ago,have you been using the supplier for other work,since,and are they chasing for all or some.

If you are going to remain trading,do NOT ignore the legal aspects,tackle politely,head on.
Putting these to one side,even when you are fully in the right,will only allow the situation to develop,to a position where nobody will care about the original cause or any culpability.

With the utmost of respect,for your particular scenario,these issues run from the company holding out due to perfectly understandable,and legitimate reasons,right up to them being serial abusers of subbies...

You may find,a small amount of money spent gaining a specific legal advisers opinion,to be cash well spent.

If my legal expertise was sought after...i'd have softer hands,and more houses ;)
 
Why haven't you taken your customer to court over their non payment?

You should NEVER allow anyone to owe you such a sum when you are a sole trader......
 
Your creditors may be threatening to take you to court, however if the court sees you have made an offer to pay they will not take sanctions against you. If your debt is greater than your assets then techinically you are insolvent. That is a liquidity ratio of below 1:1. It is illegal to operate insolvent. Of course this is the loophole many people in your postion use! As maybe your debtors are or will! They go into liquidation then form a new business, not good I agree but it is part of the cut and thrust of the business world. Do you have an accountant? Ask them what your liquidity ratio is. Explain to your creditors they may force you into liquidation if they do not agree to a scheduled payment plan. They should understand they will get nothing if that is the case or perhaps a settlement of .05 p in the pound. In your position I would pay over what I can as and when I can. Regular payment of even £50.00 per month will stave off court action. Just do a BACS transfer to their account. It is a little known fact that there is not much the court can do about debt.
Get a debt collector onto recovering the money owed to you TODAY! do not delay. Factoring is probably not good in this case as the debt will still be on you, it will just be the bank as well as the wholesaler after their money.
 
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In fairness £2800 isn't that much. I know of a sole trader who has £45,000 owed to him. His words to me were that he was too busy to chase it up. (I think I'd find the time)

If the supplier wants to try and put you out of business over this he'll never get his money back. The supplier should be ashamed of themselves, threatening legal action over a piddly amount such as this. You'll be able to pull the money back on new jobs going forward.
 
In fairness £2800 isn't that much. I know of a sole trader who has £45,000 owed to him. His words to me were that he was too busy to chase it up. (I think I'd find the time)

If the supplier wants to try and put you out of business over this he'll never get his money back. The supplier should be ashamed of themselves, threatening legal action over a piddly amount such as this. You'll be able to pull the money back on new jobs going forward.
Where you been hiding Rapp.?
 
Have you sat down with the branch manager and explained the situation? I got in to a little situation about 5 years ago and owed my wholesaler (which was/is a multi national)10K as I was knocked 28K and just chipped it down as much as I could over a few months or so.
 
Could be 30day payments £2800 on material and the rest on labour which is about £900 a week. IMO its not loads to be owed if 30 day payments and supplying material for a one man band/small limited company. Feel for the OP though as a lot of money to be owed/lost. Hope he gets it sorted and his wholesalers should be ashamed of themselves if they know his situation and should be trying to help him pay them back over 3 months or so.
 
He's still a 1 man band - whether a sole trader or limited he's still owed far too much by a customer!
Being a one person Ltd. Co., by this time tomorrow, I will have one customer owing me around £9k+vat, and that's without the other customer that I have work going on for, that is valued at over £4k, this is about 3/4 of the way through, and the other work that is going on totalling about £5k that is ongoing some without PO's yet.
So, £6k8 for a "one man band" is not necessarily a lot.
 
This is the benefits of staged payments on jobs or even weekly rate so that the client pays little and often. The guy I was 'mating' for wasn't very good at asking for regular payments when work went on a bit so ended up not invoicing for 6 months or longer yet your wholesaler bills still need to be payed. I had to step away and seek other experience and regular pay on agency until my NVQ comes through but he still owes me some until all his invoices get paid. We have to be hard working at our bills to enable the money to come in regularly. It is too easy to forget work that has been done when you leave invoicing until the last days and is not regularly updated.
My newbie two pence worth. Experiences of others is what business is all about and learning from each other is 'priceless'
 
I run a wholesalers in Durham, when this happens to our customers we always help out with payment plans and keep supplying to help them trade out of a problem. In most cases it works and the good will we get from helping is never forgotten and repaid with loyalty. I also tried the pay up or court route but in my experience we never got a penny, so taking the helpful option works
 

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