Client issues - Non payment of invoice - The Book-keepers Forum (UK)

KHagland · Veteran Member

Client issues - Non payment of invoice

Flex Accounting Services · Senior Member

Morning Kelly. First of all I'm going to say something that you know as you've already mentioned it - never ever do start any work for anyone until you've got your letter of engagament signed and got copies of all the money laundering regulation documents. Secondly, for new customers if its a chunky amount of work, I would always get cash up front until you can establish a working relationship. Enough of the lecture though sorry!
You say you've emailed and called him. Have you been to his place of work yet?
I've only ever had one situation like this and he was one of my husband's friends. Got the money eventually though when I mentioned small claims court!
Bev

Wella · Expert

Hi Kelly

If you still have his paperwork keep hold of it. Dont return it until he has paid you in full and the cheque has cleared. Then dump him.

Bill

KHagland · Veteran Member

Thanks for your comments. I know I should have organised the letter of engagement before working for him but he was my first client and things didn't go the way I planned, I'm a lot better now.
I have tried calling him again this morning, no answer.
Unfortunately I don't have any of his paperwork as he took it all back to process a manual VAT return which was overdue!
He has two shops and I never know which one he will be working from or if he will even be there so I'm not sure visiting him at work would help.

If he does happen to sign the letter of engagement (I sent it out with the invoice) and then still doesn't pay how do I go about ditching him. Do I just follow the notice period guidelines on the letter of engagement or can I just stop working for him as he didn't pay me?

Thanks
Kelly

Amanda · Expert

Hi Kelly,

I would say don't give him any notice as you commenced work without the letter of engagement, its a shame you haven't got his paperwork. I use to have a client that was always late paying me sometimes as much as 6/7 weeks late. He sometimes answered my calls and as pleasent on the phone, but I soon got to realise that this was just the way he was!!! I did work for him for 2 years, but eventually I had the nerve to let him go. He was OK about it and once again he owed me money! Anyway I kept hold of all his paperwork until he coughed up, which he soon did, I did wait for the cheque to clear before handing it all over. I would say be thankful its only 5 hours and not a whole months worth of hours.

I would keep pestering him as much as you can for the money, then threaten small claims court etc, if it dosen't work just put it down to a bad experience and don't bother working for him again, you will soon feel better knowing that you have ditched him!!! Lets face it he will have another VAT return to do soon, so its him that will come crawling to you, then you can tell him exactly why you won't deal with him again.

My bad client that I had he will always be the same and never change despite telling me that he just 'forgotten' to drop the cheque round, I felt very relieved when I ditcehd him!

HTH
Amanda

-- Edited by Amanda on Monday 8th of November 2010 11:55:12 AM

Susie Sue · Senior Member

I would send reminder letters - stronger each time - especially as he's not taking your calls and then small claims court. Just get on his nerves basically!! wink

ICBUK · Guru

Hi Kelly,

Sorry to hear you are having trouble.

Try writing a letter and send it recorded delivery. In this letter you should state you have tried contacting him several times, give lists of what is outstanding and how old the invoices are. You should give him a set time to respond (usually 14 days) and say after this it will be sent to the Small Claims Court (SCC).

If you need advice on how to use the SCC contact the ICB's legal advice team (free).

There is some information on Credit Control here: http://www.bookkeepers.org.uk/self_employed_members_area/credit_control

You should probably email the ICB and just let them know, as statistically he may put in a complaint about you to avoid paying the bill. (Don't worry about that as the ICB can spot these a mile off, but it may help if you let them know your having problems first)

Hope this helps.

ADAS · Guru

I've allways thought it would be useful to members with a practicing cert if the ICB included some advice on the relevant area of the website. AAT publish a draft T&C's, Letter of engagement and professional clearance on the website in their MIP area.

Naturally, every situation is different but some help would be useful. Perhaps it could include sections on retention of title, and drafting your agreements in such a way that if a ltd co owes you the debt, it's possible to claim against the directors.

As has been mentioned the ICB appears to becoming more progressive, I think the above would help.

-- Edited by ADAS on Monday 8th of November 2010 01:02:51 PM

Peasie · Expert

I'll need to have a look at the code of conduct as I think the ICB might frown upon my approach - baseball bat, balaclava and boiler suit.

Amanda · Expert

Hi,

This thread has now prompted me to look at my letter of engagement as it was a long time ago I used mine. I have a meeting on Wednesday with a potential client, and when I went to look for my letter of engagement on my Laptop, its not there!!! I did have a few problems with my laptop some while ago and I know that there was a few things, luckily some of my stuff not clients stuff was not saved in time when it crashed one day. I hadn't needed the letter upto now. I have a hard copy but reading it its rubbish!!! Writing letters is not my forte!
Can anyone send me a letter that I can change to suit me?? It only has to be a basic one.
cheers.

elly422@nltworld.com

Amanda

ICBUK · Guru

Hi,

Tony the ICB does have a Letter of Engagement which covers the T&C's in simple terms.

Maybe worth bulking it up a little? Although I think it should cover everything you need.

Having said that it probably needs something added for MLR and copies of ID etc.

Peasie · Expert

The last time I looked I wasn't that impressed with the ICB effort when I compared it to others (although the "others" also weren't appropriate for myself). Tried to look again but the link take me top the ICB crest page. Need to get the link sorted out.

kjmcculloch · Guru

Regarding unpaid invoices. There have been a few posts advocating holding clients paperwork until invoices are paid. This is for information of those bookkeepers in Scotland only. DO NOT with hold clients paperwork due to unpaid invoices. This is a criminal offence. Non payment of invoices is a civil matter, but holding paperwork is theft, a criminal matter.

DON'T GET CAUGHT OUT

I would always advocate a few letters then civil court proceedings. It is always best practice to have a credit control procedure written down before you need it. know how much credit you will extend to each client, when overdue notices go out, trigger points for letters and court action. You may never need it, but it's worth having just in case.

Kris

Stardoe · Guru

Hi Amanda,

I have sent you a copy of a Letter of Engagement to your email address

Pauline

Amanda · Expert

Hi Pauline,

I've just noticed that I have an error in my e-mail add, it should read:-

elly422@ntlworld.com

Could you try again as its not come through.

The e-mail add on my Profile dosen't work (must delete it)!

Many thanks for your help,
Amanda
Ps just changed it on profile.

-- Edited by Amanda on Monday 8th of November 2010 04:14:38 PM

Stardoe · Guru

Hi Amanda,

Didn't even notice the error

I have sent it again!

Pauline

ADAS · Guru

ICBUK wrote:

Hi,

Tony the ICB does have a Letter of Engagement which covers the T&C's in simple terms.

Maybe worth bulking it up a little? Although I think it should cover everything you need.

Having said that it probably needs something added for MLR and copies of ID etc.

Hi James,

I've seen the document and bulking it out is what I meant really. I know we shouldn't expect the ICB to do everything for us. But in this case I think it's appropriate.

-- Edited by ADAS on Monday 8th of November 2010 04:49:24 PM

-- Edited by ADAS on Monday 8th of November 2010 04:49:56 PM

ICBUK · Guru

Hi,

Kris is right, but also for the rest of the UK. Its a bit of a complicated matter, but simply put anything they have given you is their property. Any work you have done is yours.

Tony, yes why not, seems silly each member doing their own thing when the ICB could do it once and then share it. I will ask the legal team. We have been assured legally it is all you need to stand up in court.

Peasie, sorry about the broken link, will look into it.

I have also just seen a preview of this months newsletter and they have taken your advice and put an article up about changes to the website and new / updated pages as you mentioned on this forum.

kjmcculloch · Guru

It's not really the same James.

In Scotland theft is a crime at common law whereas in England and Wales it is statute law. In the Statute theft is described as:

Dishonestly appropriating property belonging to another with the intention of permanently depriving the other of it.

Therefore there must be an intent to permanently deprive the owner of it.

In Scotland however it is defined as:

"the taking and appropriating of property without the consent of the rightful owner or other lawful authority", the law does not require the same intention to permanently deprive the owner of their property. There is actually case law for a similar thing in Kidston v's Annon 1984.

Either way, I would agree that its not advisable to do, but I think you have the legislation slightly confused.

Kris

-- Edited by kjmcculloch on Monday 8th of November 2010 05:58:00 PM

Amanda · Expert

Hi Pauline,

Got it now, thanks you a star.

Regards,
Amanda

ICBUK · Guru

Hi,

Oddly enough there is an article on this in this months ICB newsletter:

http://www.bookkeepers.org.uk/News/1160

To read the whole newsletter:

http://www.bookkeepers.org.uk/News/1146

kjmcculloch · Guru

A nice article ignoring the unique position of the Scottish legal system.

Kris

Amanda · Expert

I never knew it was different in Scotland, you learn something new every day.

kjmcculloch · Guru

Yes Amanda, Scots law is different in a lot of ways to English and Welsh law. Especially criminal law where much is based on common law rather than statute. Unfortunately most organisations tend to focus on English and Welsh as it generally makes up the majority of the readership.

The main difference in this case is for theft in England and Wales you need to intend to permanently deprive the owner of their property which in this instance you don't, you are only holding it until you are paid.

But in Scotland time-scales are not a factor, to take the property of another without their authority, or lawful authority is an offence. It doesn't matter if you have it for 10 minutes or forever. As a wee aside, this is the reason we don't have wheel clamping in Scotland as there is caselaw that it can constitute theft.

Kris

-- Edited by kjmcculloch on Tuesday 9th of November 2010 12:49:14 PM

Amanda · Expert

Thats interesting Kris, I think the clampers are a joke, fortunately I have never been clamped!

The paper work that I held onto was the VAT quarter stuff, mind you he had got it to me after the VAT Q was due in which was normal for him, I dread to think how much he would have paid by now to HMRC for late charges. I know the new accountant didn't get the yr end in in time either, I expect he finally realised how bad he was, incomplete records springs to mind! I'm sure his dog ate eveything!

Glad to have got rid of him!
cheers

Peasie · Expert

Scots Law - where we have the "not proven" verdict.
Which is like not guilty - just don't do it again. We know you are guilty - we just can't prove it.

kjmcculloch · Guru

It's not ideal, but at least its better than PACE.

Kris