Consider this……..
You’ve provided a service or sold goods to a new customer and given that you were looking to keep hold of the customer you ensured that you provided your goods or service promptly to the full satisfaction of the customer and you issued your invoice sometime later. The weeks roll by and the invoice is not settled. You call the client to request settlement and all you get is a series of excuses, no money. You send a letter requesting payment, followed, a few weeks later, by a stronger letter. All you get for all your efforts is a waste of time – and that creditor is still asking for payment of that supplier’s invoice you’ve had outstanding for two months!
Bad debts are, unfortunately, a fact of life when you’re running or involved in the running of a small to medium size business. It’s not that larger businesses don’t have the problem of bad debts, but larger enterprises are both better prepared and have the added resources to manage and, of course, absorb the losses this can cause. Smaller businesses deal with this issue in a variety of ways: some choose to write off the invoice completely but some opt to fight back and use the Small Claims Court which is designed to provide a speedy and reasonably cost effective way of resolving disputes.
Although the establishment of a small claims court took some time after it was developed in the UK but we have had the track for over two years and more and more people are using it. Experience in England shows that out of the 2 million small claims issued each year a small proportion actually go to Court and even less go to a full hearing. Its clear that the use of the small claims court can encourage your bad debtors to settle up old invoices quickly. Importantly, the Small Claims Court oversees a wide range of disputes with a maximum financial value of under £5,000
Should you require any further information, please contact Elliott Phillips on elliott.phillips@isolas.gi