Is it ever worth chasing an old unpaid invoice or is it just throwing good time after bad

[DebtRecoveryUK]

I’m curious how others here approach older unpaid invoices. Say a client did not pay 8, 12, or even 18 months ago. Maybe you sent a few reminders, went quiet for a while, and now you are wondering if it is even worth revisiting.

Do you chase it again? Write it off? Or pass it to someone else and let them handle it?

I have seen cases where businesses thought the debt was long gone, only for it to be collected fairly quickly with the right approach. But I have also seen situations where chasing too hard caused reputational or relationship headaches.

How do you weigh it up?
What is your own threshold for when you say, that one is not worth it anymore?

Would love to hear how other business owners and finance teams handle this dilemma.

 

[Adam]

I've always been fortunate enough where I've not had to worry about it, in the few instances in the last 20 years that the customer has randomly gone AWOL, never to be seen again, I had already taken deposits which covered costs and a bit of administration costs/profit.

I also have the luxury of picking and choosing the clients I work with, if something seems off or my research on the company or person doesnt seem right then I just decline the project.

Obviously not every business can work like that, but I think alot of service based businesses should be taking deposits that cover these eventualities to save the stress if something didnt go to plan.

 

[DebtRecoveryUK]

I've always been fortunate enough where I've not had to worry about it, in the few instances in the last 20 years that the customer has randomly gone AWOL, never to be seen again, I had already taken deposits which covered costs and a bit of administration costs/profit.

I also have the luxury of picking and choosing the clients I work with, if something seems off or my research on the company or person doesnt seem right then I just decline the project.

Obviously not every business can work like that, but I think alot of service based businesses should be taking deposits that cover these eventualities to save the stress if something didnt go to plan.

Yes, we have definitely seen more and more of our clients now taking deposits, and it is becoming standard practice in many sectors. That said, like you rightly pointed out, one size does not fit all.

It sounds like you have built a solid approach over the years. Having deposits in place to cover costs and admin if someone disappears is a smart buffer, especially when it has only happened a handful of times in 20 years.

Being able to choose who you work with is a huge advantage as well. Doing proper checks up front makes a big difference, and it is something we encourage when clients come to us with trouble further down the line.

Not every business has that luxury, but I agree that a lot of service-based businesses should be building some form of deposit or upfront protection into their terms. It can save a huge amount of stress later on if things do not go to plan