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Indulge In Invoicing Correctly

The importance of clarity.

A key part in avoiding being owed outstanding debts by clients is invoicing clearly and correctly. The client needs to be able to easily see how much they owe you for your products or services. You will also need to present your invoices to a debt collection agency should it come to an unpaid invoice leading to outstanding debt, so it is essential that they are clear, concise and correct.

“I’m shouting at you, can’t you hear my voice? What do you mean you haven’t received my invoice?”

– Kerry Bland.


Keep the layout simple, you don’t need to over complicate things and it’s best to stick to a basic template of contact and payment details at the top, details of the products/services that you are billing for below and a clear total at the bottom. Your contact and payment details should be thorough and clear; a fussy and complicated invoice is more likely to make its way towards the bottom of a client’s ‘to-do’ list and delay payment further. Ensure your final total is inclusive of VAT, discounts, offers and promotions, postage, expenses and any other extra charges. These all should be clearly listed and totalled cumulatively.


Why not save yourself some time and use a template, good, basic invoice templates can be downloaded from websites such as and Once you have a template add these top tips to ensure your invoices have big-voices.

Top Tips.

· Clearly state your payment terms, eg; ‘payment must be received 30 days from date of invoice.’

· Offer discount on next purchases for payments received inside normal trading terms.

· Itemise if applicable eg; ‘5 phone calls and 2 letters’, ‘17 widgets supplied at 15p per widget.’

· Include the contact name(s) of the person who is likely to authorise payment, this is the person who deals with your accounts and invoices. If this person isn’t you, ensure you add their name so it gets sent back for their attention.

· If requested, supply purchase order numbers.

· If e-mailing invoice, also send by first class post to be double-sure it is received.

· Send an interim invoice to “test the water.”

· Try and set up a monthly retainer, preferably by standing order.

· Offer various ways to pay eg; Bank transfer, credit card or even PayPal.

· Make sure both your company registration number and the VAT registration number are clearly displayed.

· Give each invoice a unique number in the header. This number is often prefixed by the client’s name eg; ‘JONES456’, this can be used as a future reference for both parties. Invoice numbers are mandatory for VAT registered traders and companies.

· Put your bank details on the invoice to make it easier for bank transfers and to prevent delays.


Consider factoring your invoices (selling your invoices to a third party before they are paid by your customers.) Factoring is a good option to ensure regular cash flow but it can be expensive. On average, factoring fees generally range from 1% to 12%. Factoring is unlike other forms of finance such as an overdraft or loan as acquiring it normally requires little personal security as it is secured against future income (money you have already earned.)

And finally…

Overall, clarity, consistency and simplicity are the keys to effective invoicing. Follow our tips and use online templates to create a clean, easy to read and more importantly, easy to pay invoice! An invoice like this is much less likely to end up at the bottom of a pile and much more likely to turn into hard earned funds in your bank account!

What is a Statutory Demand?

Statutory Demands are one of the most useful tools in recovering debt. A Statutory Demand is a formal, legal demand of payment being fulfilled within 21 days of the demand being served. They are also a warning of consequential action if the debt is ignored. Consequences such as legal action, the winding up of a company or even bankruptcy generally ensure swift payment of the debt in over 80% of cases. It also informs the debtor of their right to dispute the demand, and who to pursue if they wish to do so.

I am owed money, Is a Statutory Demand suitable for my needs?

–          Due to the Statutory Demand having the option of dispute, they can only be used to resolve previously undisputed debts.

–          A statutory demand comes at a serving cost, so they are suitable for debts over £750, but more realistically suited to debts over £2000 to ensure financial benefit.

–          Statutory Demands apply only to England and Wales as Scotland practise different legal procedures.

“Yes, they owed me over ten grand. They paid up though, after a Statutory Demand”

-Kerry Bland.

 Ensure the Statutory Demand is personally delivered, preferably by an experienced Legal Process Server (such as Jack Russell!) to avoid any potential problems later down the line.

What do I do if I’ve received a Statutory Demand?

–          If you have received a Statutory Demand, you have 21 days (or 28 if you live abroad) to satisfy the demand. – The demand can either be paid in full or an agreement can be put in place if you wish to pay in instalments.

–          If you wish to dispute the Demand, you have 18 days (or 22 if you live abroad) to do so.

DO NOT ignore it. Ignored Demands can have serious financial consequences to you or your company’s financial health.

Debt collection and the small business

Not many small businesses can handle erratic cashflow. Cashflow is the lifeblood of any business since this is the oil that keeps the engine of manufacture or supply alive. And with so many businesses on the edge during the current economic downturn making sure that you get payment for your goods and services on time is vital for you to stay alive.

Whilst trade credit has become common amongst suppliers there is no reason for any business to be starved of cash with proper forecasting, funding lines and an efficient and effective debt collection team. But how many businesses actually want to specialise in debt collection? Surely the main aim of any business is to manufacture and sell or provide services for a price that makes money. Unless your core business is debt collection it can be hard taking time away from the core operations to make sure you get paid on time.

And this is where many companies turn to professional debt collection agencies for help.

There are many levels of service available to help small businesses stay on top of their debtors. Although there is no substitute for having a small credit control person or team looking after the raising of invoices and cash allocation getting expert help to focus on collecting cash can be a real bonus. Specialist agencies have staff that are trained in the latest techniques and use the very latest software to help them track down and collect from past due customers.

If your account is big enough you can even get a tailored service designed to seamlessly fit your business so customers are not aware that they are being contacted by an external agency. Even smaller companies get the benefit of trained competent collectors chasing their debts and usually on a no recovery no fee basis.

One thing that specialist organisations that focus on debt collection have is slick procedures and reporting. They will never miss a scheduled activity or phone call so customers cannot use age old excuses of not being contactable. Personal visits can also be arranged if necessary.

Another advantage of a specialist agency is that they can collect monies in a variety of ways. CHAPS, BACS, credit or charge cards as well as cash can be accepted where your business may not have the capability to process at cost effective rates. And they will chase all the way to insolvency if necessary ensuring that some recovery is made in virtually every case.

So there should be little need for your business to become a bank and fund others at cost to yourself. Outsourcing some or all of the credit collection process can add value to the business at a relatively small cost. Your reputation as a no nonsense operation will also spread amongst your clients helping to generate higher on time payments.

Finally, customers realise that whilst they may be able to mess you around in the hope that you will see further new business opportunities, they cannot do that with a professional debt collection company.

Choosing a credit collection company is like making a credit card comparison – there are lots to choose from so taking time to find one that has the right ethos and fit for your business is worth the effort. Once established, the long term relationship should yield dividends and take a considerable burden away from the business.

6 Effective Debt Collection Tips

1) Make sure your terms and conditions are watertight.
You terms and conditions need to be regularly kept up to date, and preferably reviewed by a Solicitor. Ensure that your customer has a copy of these terms before you conclude with your contract. It is not advisable to simply attach these to your invoice, unless you have already sent them at the point of contract. Also ensure that you have a clause within your terms to legally add on any debt collection charges should you have to outsource your account to a Debt Collection Agency and then it will be your customer that has to pay such costs rather than yourselves. Make sure that English Law applies in the event of any dispute, or Scottish Law and if you are based elsewhere, the relevant law for your Country. If you are in any doubt at all, Jack Russell and our Solicitor Partners can check these terms and conditions for you.

2) Accurate credit checks.
It would be extremely unwise to give customers credit without actually checking the amount in the first place. Either, sign up with a reputable credit reference agency as this could save you thousands of pounds in the long run, and if the credit risk score is particularly poor then only deal with such customers on a cash only basis or via credit card transaction. Also check that you are not dealing with a Company that has Directors which have been involved with a previously failed Company as this again would be extremely risky. Know who your customers are as well, for example Jack Russell Limited or Mr Jack Russell and Mr John Russell t/a Jack Russell Associates. These are examples of two types of business where one is a Limited Company and the latter a Partnership. You may also be dealing with a business which is a Sole Trader or Sole Proprietor.

3) Is your invoice accurate?
Make sure that you show your terms of payment clearly on your invoice and also quote if you have retention of title to your goods. This is particularly applicable to businesses who are supplying goods rather than services. Ensure that your Company’s registration number is quoted as well as the VAT registration number so that the validity of your invoice cannot be challenged on these points.

4) Effective credit control and telephone follow up.
Always telephone your customer once your invoice has been sent out to make sure they have received it so they cannot use this as an excuse for non payment. Make sure that you have the contact name of the customers Director, Credit Controller, or the person responsible for signing their cheques and authorising payment. Have a properly structured telephone follow up system. Suspend the customers account as and when necessary, although do try and maintain good relations as far as possible. Do you really want to have a customer who pays you regularly way after their normal terms and have caused you a lot of time in the chasing thereafter? Perhaps they would be better off working with your competitors!

5) Statutory Demands.
These can be extremely useful with debts that are undisputed and are over £750. It is important however that they are personally delivered rather than just sent by Royal Mail so that there can be no dispute over whether the demand was actually received by your customer. This is where experienced Legal Process Servers are both a necessary tool and are extremely cost effective – Jack Russell can provide you with such a service on a Nationwide basis for generally around £75 – £95 + VAT.

6) County Court Proceedings.
Again, it is worth running a further credit check before proceeding to such action just incase your customer has already become insolvent. Furthermore, although such action can be taken online we would encourage you to use your local County Court service, not only to try and preserve some of the local courts that are fast going out of existence due to government cuts, but more importantly that from our experience they provide a much better and reliable service. Make sure you include not only the Statutory or Contractual interest that you are entitled to within your claim, but also the appropriate compensation fee under the Late Payment Act. Jack Russell can once again assist you with all of these tasks.

In summary, it pays to have a proper and effective Credit Control and Debt Collection system in place. If you have any further enquiries, please contact us on the above number or alternatively via email on

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