Before you name and shame, read this!

The number of times we see cases with valid disputes or genuine cash flow issues, where payment plans would have seen the full debt paid, plus interest, fees and reasonable third party costs is on the increase. This is often combined with the direct or indirect "naming and shaming of individuals and business names.

Whilst many believe that this may not only get them paid but also prevent others from being paid late or not at all. It comes with a whole raft of other dangers!

Establish the facts before making assumptions or locking horns. If issues have been raised by your customer, you should follow the quantify, justify, ratify process, in almost every case there is a reason you are not being paid!

If the reason is due to dispute ask them to quantify it, crystallise the amount, justify it with evidence (written, photographic or contract based) and propose to you what they require to remedy the dispute which, when completed, would allow the matter to be ratified to secure payment. Above all be pragmatic and commercially aware - locking horns and arguing over an amount at the time may seem a good idea, but remember litigation is costly and can take over a year easily in defended cases, is it worth it!

Try and think about matters from both perspectives - yours and the debtors. Keep a level head - it is all too easy to be tempted to name and shame, post on social media etc this is never a good idea! In some cases, it can have serious consequences and make it even less likely you will be paid: WHY?

Chasing through social media can be determined as harassment - remember social media is not a commercial medium.

Where rumours are circulating about a business failing, stop think! Is it rumour or is it fact or is it accurate? Never assume. The employees of the business may have no idea of any form of insolvency, it may be re-financing or re-structuring and not insolvency. Never assume it is the directors’ personal fault, consider what is happening to you may be happening to them. Where PAYE and VAT arrears are in place, a walk in possession order may have been actioned which severely hinders them. There may be a hidden winding up petition or a "stayed" petition or the business if a Limited Company may be technically insolvent and whilst they may pay in blind panic, you could end paying the money back over to a Liquidator in the event that they do go insolvent and the Liquidator seeks to unwind transactions. This is a painful experience especially if you have used the money.

Even worse after that the "We can get you your money back from the Directors personally for a fee" brigade, stop think! If that really was so straight forward it would be a mainstream service, yet it is not. To prove a Directors personal liability is not simple and thinking realistically the whole point of a Limited company is to seperate the Directors personal identity from the Company.

You may hear that some suppliers have been paid stop think! Have they? You then think that is preference is it? Could it be an administrator authorising the payments to complete a contract or convert to work in progress to realise assets for creditors. Do you really know the facts?

Posting inaccurate statements on any form of public forum can result in libel action, create panic amongst staff and other creditors push a business that is trying its best to salvage itself into Insolvency. Consequently, you potentially receive nothing unless you have credit protected the contract and adhered to the terms though if a dispute is in place still unremedied the claim will likely be unsuccessful. Also, consider when people and other businesses see such comments what does it say about you and your business. Are they likely to trust you themselves when they have issues, would they consider contracting with you? Additionally are you naming the right legal entity, using the correct trading name and style. Employees, Managers, sub contractors often get names, there are people with the same name, businesses with similar names could you be damaging their reputation? Could they look to claim against you?

Most of these things will not be thought about, many will not be aware. The saying prevention is better than cure has so much relevance. So many small businesses and sole traders do not think about credit checking, credit processes, appropriate terms and conditions, well worded letters and emails and yet it is so important to instill into a business culture from the start.

Credit is an integral part of our commercial and business landscape, paying upfront is not always acceptable and also comes with other issues which is for another article. All the tools are out there, with real support to help businesses get credit control and processes right, The Prompt Payment code, The Small Business Commissioner, Red Flag, Data Gardner and more. All a business owner has to do and that includes "subbies" and trades is ask and they can protect themselves so much better.

Bad debts are a part of commercial business and in most instances whilst there are some serial offenders that set up a business with the intention of obtaining goods and services then folding the company. Most fail due to bad cash management, cash flow starvation and poor credit policy or rapid growth out of line with cash flow.

If a debtor is in dispute with you, do not allow it to become a personal principle or to go unresolved too long. Refer it to a third party, or negotiate a settlement. If they offer you instalments admitting cash flow problems, work with them where possible. If you push too hard, you may recover nothing.