Using a solicitor when chasing unpaid invoices is still the best way to ensure swift payment, research has claimed.
According to fintech company Ormsby Street, two thirds of letters before action sent by solicitors will result in invoices being paid within seven days. By contrast, if no LBA is sent, two thirds of overdue invoices will remain unpaid after one month.
The figures are taken from a survey of 30,000 Ormsby Street customers. On average, invoices sent by businesses with a turnover of less than £5m a year take 72 days to be paid.
Ormsby Street, in partnership with national firm Shoosmiths, is encouraging small business to use a feature in its credit-checking tool that allows customers to send letters before action via email.
Users of the system raise a request and an LBA sent by Shoosmiths will be delivered by email the next working day.
Karen Savage, partner at the firm, said: ‘Without exception, a well worded LBA sent by a professional and reputable law firm has a significant impact in bringing payment to the fore.’
Martin Campbell, managing director of Ormsby Street, said going to court should be a last resort but that sending an LBA is a ‘highly effective method of retrieving payment on overdue invoices’.
He added: ‘For any small business already suffering from late payment, sending an LBA is a great way to indicate to customers that you’re on top of your business and that you expect to be paid on time.’