Credit control
The easiest debt to recover is one where the paperwork was right from the start. We set up quotes, terms, invoices and a chasing routine for the businesses we act for.
Agree it in writing before work starts
Arguments about payment usually come down to what was agreed. A short written quote, accepted by the customer in writing, makes most of those arguments easy to answer. A quote should state:
- who the customer is, with their full name and address, and whether they are a business or a private customer
- what work or goods are included, and what is not
- the price, and whether VAT is included
- when payment is due, including any deposit and stage payments
- how changes to the work will be agreed and priced
- your terms of business, attached or clearly referred to
Ask for acceptance in writing. An email or message saying "Yes, please go ahead" is useful evidence of what was agreed and when.
Terms of business
Terms of business set the rules for every job: when payment is due, what happens if it is late, how changes are handled, who owns materials until they are paid for, and how complaints are raised. For business customers, the terms can refer to the Late Payment of Commercial Debts (Interest) Act 1998. For private customers, terms must be fair and transparent under the Consumer Rights Act 2015, and a term that is unfair does not bind the customer.
Deposits and stage payments
On larger jobs, a deposit before work starts and payments at agreed stages keep the amount at risk small. Tie each stage to something both sides can see, such as "first fix complete", rather than to a date alone, and invoice each stage as soon as it is reached.
If you do construction work for business customers, the Housing Grants, Construction and Regeneration Act 1996 can give you rights to stage payments on longer jobs, to payment notices and to suspend work for non-payment. It does not usually apply to work for a homeowner on the home they live in.
Invoice wording
An invoice is the document a court will look at first. It should show:
- your business name and contact details, and anything the law requires you to show, such as a company's registered name
- a unique invoice number and the invoice date
- the customer's full name and address
- a description of the work or goods that matches the quote and any agreed changes
- the amount due, with VAT shown separately if you are VAT registered
- a clear due date, written as a date rather than as "30 days"
- how to pay, with your bank details
- for business customers only, a statement that statutory interest and compensation may be claimed on late payment under the Late Payment of Commercial Debts (Interest) Act 1998
Do not put Late Payment Act wording on invoices to private customers. The Act does not apply to them, and saying it does could mislead.
Retention of title
A retention of title clause says that goods or materials remain yours until the customer has paid for them. Section 19 of the Sale of Goods Act 1979 allows a seller to keep ownership in this way, provided the clause is part of the contract when it is made.
Its practical value has limits. Once materials are fixed into a building, they usually become part of the property and can no longer be reclaimed. Goods that have been mixed with others or used up may not be identifiable. Recovering goods under a clause needs care, and we never remove goods from anyone's premises.
A clause is still worth including, particularly for supply-only work, and it can help if a business customer becomes insolvent while still holding goods that can be identified as yours.
Keep evidence as you go
- the accepted quote and terms of business
- a written record of every change the customer asked for, with the agreed price
- dated photos of the work before, during and on completion
- delivery notes or signed job sheets
- messages in which the customer approves the work or raises a problem, and your replies
If a customer later says the work was not done, or not done properly, this is the evidence that answers them.
A chasing timetable
| When | Step |
|---|---|
| On completion | Send the invoice straight away, with the due date clearly shown. |
| A few days before the due date | A courtesy reminder on larger invoices. |
| Soon after the due date | A polite reminder with a copy of the invoice. |
| About two weeks overdue | A firmer reminder, and a message asking when payment will be made. |
| About a month overdue | A formal demand, adding statutory interest and compensation for business customers. |
| When the formal demand deadline passes | A letter before claim under the pre-action rules that apply. |
These timings are a guide, not legal requirements. What matters is that each step happens when you said it would, and that no letter mentions a step you will not take.
Private customers and cancellation rights
When you agree a contract with a private customer in their home, or anywhere away from your business premises, it is usually an "off-premises contract" under the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013. The customer then usually has 14 days to cancel. For services, the 14 days run from the day the contract is made. For goods, they run from delivery.
- You must give the customer the cancellation information and a cancellation form. If you do not, the cancellation period can be extended by up to 12 months (regulation 31), and failing to give the information for an off-premises contract can be a criminal offence (regulation 19).
- If the customer wants work to start within the 14 days, you need their express request. For an off-premises contract it must be made on paper or another durable medium, such as an email (regulation 36).
- If the customer then cancels, they pay a proportionate amount for the work already done. If you did not get the express request, or did not give the cancellation information, they may owe nothing for work done in the cancellation period.
- Some contracts are excluded, for example urgent repairs or maintenance the customer specifically asked you to visit to carry out, and goods made to the customer's own specification (regulation 28).
Getting this wrong can cost you the job
If a private customer was not told about their right to cancel, they may be able to cancel months later and owe nothing for work already done. Compliant quotes, cancellation information and express request wording are part of the credit control we set up.
What we do
- Draft quote templates, terms of business and invoice wording for the businesses we act for
- Prepare cancellation information, cancellation forms and express request wording for work agreed in customers' homes
- Set up a chasing timetable and standard reminder letters
- Review your existing terms and point out gaps
What we do not do
- Arrange finance or credit for your customers, or advise on offering it
- Remove goods or materials from anyone's premises
- Give tax or accounting advice, for example on VAT
Common questions
Can I charge interest to private customers who pay late?
Only if your terms provide for it, the customer agreed to them before the work started, and the term is fair. Otherwise interest on a consumer debt is available only in a court claim, at the court's discretion. See late payment interest.
Do I have to refund a deposit if a private customer cancels?
If a customer cancels an off-premises contract within the cancellation period, you must usually refund what they paid, less a proportionate amount for any work done at their express request. That is why the express request and the cancellation information matter.
If I let a customer pay in instalments, is that credit?
It can be. Giving a private customer time to pay can amount to a credit agreement, and offering credit is regulated by the Financial Conduct Authority unless an exemption applies. Some interest-free arrangements repaid over a short period are exempt, but the exemptions have conditions. Check before agreeing instalments, and tell us at the start if a customer was given time to pay.
Our status
Appeal Specialists is an independent consultancy, not a law firm. We are not solicitors or barristers and we are not regulated by the Solicitors Regulation Authority or any other legal regulator, so you cannot complain about us to the Legal Ombudsman.
We provide non-reserved legal services only. We do not conduct litigation, file or serve court documents, or accept service of court documents for you. Where the law allows, we can speak for you at a small-claims hearing or a tribunal, but only with your agreement and, at small-claims hearings, only if you attend.
What you tell us is not protected by legal professional privilege. We never hold your money. We work on matters in England and Wales only. We do not guarantee any outcome.
All correspondence by email
We deal with everything in writing, so every point and every deadline is on the record. If you are replying to a letter from us, please quote our reference.