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If you own a small business, it's likely the spectre of late payments is constantly at the back of your mind. Statistics analysed at the end of last year showed that the average small business in the UK is owed £24,841 in late payments on any given day, and 78% of SMEs have money owing to them outside agreed payment terms on any given day.
If you are having problems extracting money owed to you, and the amount is under £10,000 (£5000 in Scotland and £3000 in Northern Ireland) you can file a contract claim in what is called the small claims court. It's often used to solve consumer issues but is equally useful for small businesses.
However, you need to be confident you have a full case prior to filing. New fees to start the process have been brought in this year and for a claim of £10,000 you will have to pay an issue fee of £455 for a standard claim or £410 for an online claim. This is a large amount to find if you are already out of pocket.
Here at AMR we have certified specialists in both Xero bookkeeping and payroll packages, and we'd like to draw your attention to a feature in the bookkeeping package which could potentially save you money when resorting to the small claims court.
The package comes with an inbuilt quote system which enables users to create and email quotes instantly using previously set up contact, inventory and pricing information. You can then see if a quote has been viewed, and customers can click to accept, decline or comment on the quote. Quotes can be edited, resent and also turned into full invoices straightaway, and the sender can track when they were opened and approved.
Using this system can help provide ammunition to build a case for the small claims court. An audit trail gives vital evidence to protect your business, whether paper or electronic. An accepted quote forms the basis of a contract, and the Xero package's accept button provides evidence of that contract. In the event of non-payment or a contested invoice this can hold up in court.
If you'd like to learn more about our Xero accounting software service and how it could help you in a difficult situation, get in touch, with our experts and we'll be happy to explain the benefits to your business.