Unpaid invoices recovered for a local business

• Customer ignoring invoices
• Formal letter before action
• Debt repaid in full on an agreed plan

The situation

Our client was a family run business in Manchester supplying packaging to food producers. One of its larger customers, a limited company that had ordered regularly for several years, began paying late and then stopped paying altogether.

By the time our client came to us, five months of invoices were outstanding. The customer’s accounts team had stopped answering the phone, and emails to the director went unanswered. Our client was still being asked for deliveries, which it had paused, and was unsure whether to keep chasing or write the money off.

What we did

We started by reading the paperwork. Our client’s terms and conditions had been accepted with the customer’s first order, each invoice matched a signed delivery note, and the customer had never raised a complaint about the goods. That gave us a clear picture of what was owed and no sign of a genuine dispute.

We checked Companies House. The customer was still trading, had filed its accounts on time and had no insolvency notices against it. That suggested a cash flow problem rather than a business about to fold, which made recovery realistic.

Because the debt was owed by one business to another, our client was entitled to statutory interest and fixed compensation for each late invoice under the late payment legislation. We added these to the claim.

We then sent a letter before action to the customer’s registered office and to the director by email. It set out each invoice, the interest and compensation, and the total. It gave fourteen days to pay or to explain any reason the money was not owed, and said that a county court claim would follow if neither happened.

The outcome

The director phoned us nine days later. He accepted that the money was owed and explained that the company had lost a major contract. He asked for time to pay.

We discussed the options with our client, who preferred a reliable plan to the cost and delay of a court claim. We agreed monthly instalments over six months, covering the full balance including interest. The agreement was put in writing and said that if any payment was missed, the whole remaining balance would fall due and we would issue a claim without further notice.

Every instalment arrived on time. Our client recovered the full amount and, once the plan was finished, chose to resume supplying the customer on shorter payment terms.

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