Have you ever had to chase up an overdue invoice or even worse?

Not being paid at all?

So would you like to know how to deal with bad debtors and

get paid on time in future?

That's exactly what we're going to help you with in this episode

of architecture business club.

The weekly podcast for solo and small firm architecture practice owners,

just like you who want to build a profitable future proof architecture

business that fits around their life.

I'm the host John Clayton.

And if you want a business in architecture that gives you more freedom,

flexibility, and fulfillment, then go to architecture, business club.com

forward slash blueprint and download the architecture business blueprint.

It's the step-by-step formula to freedom for architects, architectural

technologists and architecture designers.

And it's absolutely free as a gift from me.

Now let's discuss getting paid on time and recovering debts.

Rhonda Jackson is passionate about helping you collect all money

owed to you or your business.

As the Director of Jackson's Credit Recovery Services, Rhonda is a qualified

credit manager and experienced negotiator.

She helps business owners resolve conflicts and maintain a positive

working relationship with their debtors to achieve the result we all want,

your debtor paying you what they owe.

Rhonda, welcome to Architecture Business Club.

Hello, John.

Thanks for having me.

It's nice to be here.

It's great to have you on the show.

Rhonda, can you, can you tell me a little bit about Ronnie and Reggie?

Who are they?

So, I can tell you a bit about Ronnie and Reggie.

Not the normal Ronnie and Reggie that springs to mind,

I'm sure, with most people.

Ronnie is my dog, Cockapoo, and, um, Reggie is my cat.

They are, they're a lovely little pair to be honest.

They do love each other.

The cat goes for a dog walk with the dog first thing in the morning.

I'm trying to discourage that actually, cause I think my cat thinks he's a

dog and where we take the dog over the green, there's lots of other dogs.

And I'm not sure that my cat is aware that other dogs might not be quite as friendly.

Like, the cat is definitely the boss in that relationship.

And at the moment, they're both sleeping,

so hopefully they won't interrupt with any, um, shenanigans

while we're recording.

Let's hope so.

Yeah.

My, my rescue dog, Maisie is.

Sat near me on the office floor over here, and hopefully she'll behave

herself while we're recording.

She doesn't always, so she might make a guest appearance.

I've got a Maisie.

Have you got a Maisie?

Is that another pet or

a family?

No, my daughter's called Maisie.

I've got two, two daughters as well, Maisie and Isla.

My eldest is called Maisie.

Oh, nice.

I'm, I'm forever getting, yeah, it is a good name.

I'm forever guessing my dog, Maisie and my daughter, Emma mixed up.

Like I'll be talking to Emma and I'll call her Maisie.

And then I'd be like, you know, shouting at Maisie, the dog calling her Emma.

It's really confusing.

Oh yeah, I have that problem.

maybe it's, I don't know, maybe it's an age thing for me.

Roger, we're going to talk about how, how to get paid on time.

And we're going to talk about recovering debts today, which

I think this is a really.

Important topic.

And it's something that I think as business owners, I mean, obviously

it's something we never want to have to deal with, but sometimes it happens.

So I think it's really important that we do talk about this and find out, uh,

what might be involved in getting paid and the things that we can do about it.

What steps can we take to avoid bad debtors in the first place?

So I think prevention is definitely better than cure.

So one thing I've, I see quite frequently is it's really important to

know exactly who you're dealing with.

To know who your client is and to know the correct legal identity of that client.

So for example, if they're a limited company, to ensure that you've got the

correct limited name and number, um, to know if they're a sole trader or a

partnership And to get all their contact details, a trading address, a registered

address, telephone numbers, email address.

And often people will have a contact of a person.

And if that person is on a two week holiday, who else do you speak to?

What's the head office number?

To collate as much information as you can from the offset is really important.

So I always like recommend that people get a new customer onboarding form

where they fill in all those details so they have that up front right from

the offset and then they can establish who they're actually dealing with

and maybe run a credit check, um, look at, you know, company's house

to see if accounts have been filed on time, if there's anything negative,

any negative markers against them.

So yeah, just really detailed, getting all the detail, getting all the information up

front, I think is the best step early on and checking out who you're dealing with.

So there is probably a little bit more due diligence that.

That we should be doing as business owners before we just accept every

client inquiry that comes through that actually doing that little bit of due

diligence up front, uh, even just some of those relatively basic things to do.

Aren't they just making sure we've got the right contact details.

They mentioned there's a few checks online we can do there, but that's

going to help stand us in good stead, uh, at the very beginning.

The thing is sometimes you, you could think, oh, they're

a big company, they'll be fine, and I don't need to take, you know,

I don't need to do those steps.

But big companies fall into problems as well, especially, especially like in, in

the construction industry at the moment.

We are seeing some really big players struggle with payments.

So I think it's a good practice to do that.

And sometimes there's people who give the, they can give an impression that

they're doing very well for themselves.

And that might not reflect the same picture when you look at their company

accounts and that kind of thing.

So it's, it's definitely worth looking into that.

If an invoice becomes overdue, what, what first steps would

you recommend to recover the debts?

Well, even before the payment becomes due for payment,

it's always good to check in with your customers, make sure that

they've got all that they need.

You know, keep communication open and friendly.

Have you got any problems?

You know, is there any queries on the invoice?

You've got my bank details.

Checking that sort of is always a really good idea.

If you find then that the payment does fall overdue, again, it's

about, you know, keeping the communications open and different

streams of communication as well.

I personally, I like picking up the phone and speaking to people, um,

because it doesn't have to be an uncomfortable conversation or a nasty one.

It can be a very polite Reminder phone call and you can follow it up with emails.

You can ping over a copy of the invoice, you know, just to let you know that

this has now fallen due for payment.

If you could update me with a payment date, I'd really appreciate it.

So you just start those gentle reminders really early on so that that client

knows that you have a process in place should things come overdue for payment.

You know, so just, Keep talking and then you can establish if they if

there are any problems or what's going on and when you can hopefully

expect to receive the payment.

So have a process in the first place and ensure that your

clients are aware of that process.

That that's going to really help things.

And I like the point that you mentioned there about just picking up the phone

and talking to your clients, because I think in this day and age, often we.

Very like we can be too quick to just reach for email and to send

everything via email and messages where actually just going a bit old

school and actually just doing it.

Talking to people surprising that can have, um, with just much better results,

This is it.

And I think you're Get the email where someone's on holiday.

So they haven't seen the email or maybe you've gone in someone's junk folder or

there's lots of different reasons or, you know, you can pick up the phone and

say, Oh, I'm on holiday at the moment.

And you weren't aware.

You know, you sort of getting all angry because you think they're ignoring you,

or maybe they've gone into hospital.

There could be loads of situations where sometimes I think just picking

up the phone and speaking to people can make it easier all round.

that's good advice.

So assuming that, um, let's say an invoice is overdue.

We've, we've done, you know, we sent reminders.

We've tried to phone them.

We've got email reminders going out and, and we've, we've made

them aware what our process is for.

You know, getting invoices paid and for whatever reason, those

steps are still not working.

What could, what could I do next to get paid if those first few

steps don't result in getting paid?

Well, the first thing I'd do is make sure you've kept a log.

So you've kept a log of when the work was undertaken, when you issued the invoice,

when it became due, when you chased it.

So you've got a log so you can prove all the actions that

you've taken to this point.

You're, you're entitled to charge interest for late payment under

the consumer late payment laws.

So you can add late payment on, or you could do, uh, a letter before

action, which is a letter that has a certain criteria that states

if it's not paid before a certain date, there'll be a consequence.

Normally legal action proceeds.

You could maybe get a solicitor to send a letter.

Or you could send a registered post so it has to be signed for just to

bring it a bit more attention if you feel like you're getting ignored.

and I think you have to lay out a consequence if you're in a position

where you can stop supply, stop working.

And stop increasing the debt balance further.

That's always a really good idea,

I think that thing of when you send.

A strongly worded letter, um, and you say that charges are going to start getting

added, that interest is going to be added.

Sometimes it can just be, it can be a very small amount of money

potentially that gets added on.

But I think psychologically that can really help people start to

think, Oh, geez, like this is going to cost me more money now.

It's definitely worth considering doing that.

So, okay.

We've done all that stuff.

We've sent.

A strongly worded letter now, so whether that's what we've sent ourselves or

from a solicitor or registered post, we've done it and it's still not worked.

So what else can we consider doing after we've sent that strongly worded letter?

So basically if you've covered off all the pre action steps,

like you've done all your phone calls, you've sent your letter before

action, you've told them the date that you're going to proceed, you can

always issue a claim to the court.

If it's under 10, 000, that can be issued on the small,

through the small claims court.

We do that for all our clients or another option is the small claims

court at the moment is quite slow.

People are aware there's lots of delays in the court system.

So one thing we've been doing more of recently is stat demands, because

a stat demand will give someone 21 days in which to make a payment.

Otherwise you can proceed with the winding up order that tends to work

quicker than the court process at the moment, although often it's cheaper

to issue the claim through the court.

Sometimes you have to decide on the details of the claim as to whether

the court system would be the better option or the stat demand winding

up order would be a best option.

Because obviously if you do proceed with the stat demand and a

winding up order, winding someone up doesn't mean you get paid.

The reason you want to threaten winding up really is to encourage

them to make that payment.

And that's, that's the ultimate goal really, isn't it?

It's not about being right.

It's about getting paid, which is important to everybody's business.

At that point, there's still a couple of different options

for people to recover the debt.

Could you tell me about the steps required to go through the small claims court?

Could you tell me a little bit about that?

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Now, back to the show.

Yeah, of course, because also we see lots of people that issue

their own claim through money claims online, for example, and then once they've

issued the claim, they're not really sure of the process, what happens next.

So once the claims been issued, the defendant will be given by the

courts a deadline in which to respond by, and they need to respond saying

they either admit that they owe the money, or they defend the claim,

or they defend and counterclaim.

And if they don't respond to the courts within the deadline given,

then you're able to request a default judgment on the basis that

the defendant is not responding.

And that happens frequently.

Depending on then how the defendant response depends on

the next action that's taken.

So it's quite hard to say because there's a different process if they were to admit

the money as to if they were to defend or if they were to defend and counterclaim.

But the court will then give directions to each party.

giving them date deadlines of what needs to be done prior to a hearing and you're

still you're still able to settle that and um accept a payment at any point

when that's in that legal process but at least you know there will be a conclusion

Okay.

I went through the small claims court Once many years ago,

and it was for a small debt.

I think it was only like maybe two to 300 pounds.

It wasn't a lot of money, but as a matter of principle, I was like,

he's not getting away with this.

Like he's going to pay this.

And it was such a slow, laborious process going through the small claims court.

And I think.

I did it myself, there was very little guidance on, um, there was

the stages to go through, but I think mine ended up being a default

judgment because they never responded,

but there was like, there wasn't any kind of like, like significant reminders.

There was, there was all these actions that I had to do to push it along.

And I had to keep putting reminders on my calendar to remember

to check in, to do it, and

by the time it actually got to the point of the debt.

Eventually being collected.

I think it had taken something like from start to finish.

It was over 18 months.

It might've been nearly two years before I collected all of the debt.

And there was various other fees that were added onto it.

There was interest.

There was some other charges and, and then he paid in installments, you know?

And it was like, I don't know, 50 pounds a month for X number of months.

And it took ages to get the money.

I did eventually get every penny, but it was.

I mean, goodness knows how many hours I must have spent on it.

And because it's something I didn't do every day, I wasn't familiar with it.

If I'd have known you a bit earlier, then, um, I could have, could

have contacted you and you could have helped me out.

Would have made my life a lot easier.

We see that a lot and we have that process in place.

So we have, we have a system where we have all the reminders

to chase everything through.

And unfortunately, like I mentioned previously, the courts are in

a bit of a state at the moment.

We've been told it's going to get better.

haven't really seen any vast improvements as yet, but it is improving.

And I've got claims about two years old that I'm still

waiting to get to a hearing.

So I'm hoping that with the court, um, process getting better, that

that will speed up that process.

But yeah, it can be painful.

And I've got, I've got debts that are really old where when you set an

installment arrangement, um, sometimes you have to work with the debtor if they

can, you can't take what they haven't got.

And if it means I've ones that I collect 10 a week and I've been doing that for

years, but ultimately we deal with that.

We chase that payment through every time there's a missed instalment, we're on it.

Our client will just know because we, the money gets paid into their bank.

So we sort of take the effort out of it for, for people, if you like.

And the amount of time I've heard people say, it's not

the money, it's the principal.

Because that's it really, isn't it?

Sometimes I think we've, when we're all running a business,

we all work really hard.

There's lots of business owners out there that actually probably earn

less than minimum wage if you look at how many hours you put in sometimes.

And when you've put in your sweat, blood and tears and sacrificed your evenings

and your weekends and everything else, you want to be paid for what you do.

And, you know, We're all entitled to that.

So that's, that's why I do it really is because I've also seen the impact it has

when people don't get paid and how, how much it can affect people's business.

There's been a big, big local business recently in Norwich It's just gone,

you know, gone out of business and I've seen a ripple effect of how that's

affected other businesses and it's sad just, you know, it does have a big

impact on people and their businesses.

Could you explain briefly how, how did debt recovery agencies

work and how do they typically charge?

Because I, I don't know if it's works the same way with all, debt recovery

agencies, but could you briefly explain how it typically works in the industry?

it, doesn't work the same with all agencies.

Some people will charge an upfront fee.

We don't do that.

When I set up Jackson CRS, I tried to make our pricing structure really transparent.

A lot of debt recoveries will offer no win, no fee, then they want you

to pay, um, so much to be set up on the system and that kind of thing.

And most debt recovery companies will do no win, no fee on a

percentage, which is what we do.

We charge a percentage of money collected, um, but we add

all the fees onto the debtor.

So best case scenario is the client gets paid in full, we get paid by the debtor.

And I, and a lot of other debt recovery companies will do that, but there

are also debt recovery companies out there that will charge a lot more,

even if they don't recover anything.

So yeah, generally I wouldn't, if it was me, I wouldn't hand over money.

And I'd make sure I was doing it on a no win, no fee basis because there's, there's

lots out there that will offer that.

That's reassuring to know, especially if there's any,

um, architects or practice owners that are listening into the show and

maybe, maybe it's only a small debt that they're looking to recover.

I think that was the difficulty that That I'd had with that debt

years ago that because it was a very small amount of money, the only debt

recovery agencies that I really was aware of, um, I think just locally

where I used to be based, there wasn't any option for no wind, no fee.

And because it was such a small amount of money, it was going to cost far more money

just to get set up on the system than it, than it, the debt was actually worth.

So unless I had.

Several debts to recover, which thankfully I

didn't, it just didn't stack up.

So it's really reassuring to know that there are companies out

there like yours that do offer that option of no win, no fee.

So that's good to know.

Rhonda, this has been really interesting and I think it's been a

really valuable thing to talk about.

What is the main thing?

that you'd like everyone to take away from this conversation.

I think I'd just like to bring it to the forefront of

people's minds that even to really know who they're working with and to

know what their situation is And to know what their financial situation

is and check in on it, because just because this customer has been really

good and profitable and they've been a customer for years, that situation

might have changed from last year.

And I see firsthand the impact of if your biggest customer.

suddenly couldn't pay you, what impact would that have on your business?

And I would really like to keep that in the forefront of people's minds.

And also, people don't want to chase for money because they

worried about losing a client.

But if your client's a non paying client you shouldn't worry so much.

You know, you need, everyone needs to get paid for what they do.

And you can ask nicely.

It doesn't have to be an uncomfortable experience.

Thanks, Rhonda.

Is there anything else that you wanted to add that we haven't covered

in the course of the conversation?

In your line of work, is this something that you think about

very often in relation to getting paid?

Well, personally, no, because I've more fortunately not had

too much experience of bad debtors.

But I think that is that I have, I've been perhaps a little bit

more careful with the clients that I've worked with over the years.

I've been a bit more particular.

I dare say that there are architects and architecture practice

owners out there that have been stung, uh, far more than I have.

So, um, I think it is something that's going to be relevant for a lot of us

out there at the end of the day, we want to get paid, we've done the work, we've

done a good job, we want to get paid.

Rhonda, that's been great.

This is one of the question I wanted to ask and.

It's nothing to do with the topic.

It's just a regular question.

I like to ask all of the guests on the show.

I love to travel and to discover new places.

And I was wondering if you could tell me about one of your favorite

places and what you love about it.

It could be near or far, wherever you like.

Does anywhere spring to mind?

Oh that's quite tricky because when I think like, of favourite

places, I'm thinking of Favorite local areas that I go to walk my dog, like

around Whittingham and stuff like that.

I think that's, oh, on a podcast that's probably gonna come across

really boring, like, I should say, barley or somewhere more exotic.

I like being outdoors.

I like being near the water.

So for me, I suppose, yeah, Whitlingham, Thetford Forest, they're

my favorite places that I get to go to at the beach, the North Norfolk

coast, all those kind of local.

For traveling and going further afield I don't know, but I really

fancy going to Switzerland.

I've never been to Switzerland and I keep looking at that at the

moment and that's of interest to me.

Yeah, and my daughter wants to go to Greece or one of the Greek

islands, so we might go there also.

Oh, very nice.

Yeah, there's some, there's some cool places.

They've mentioned.

I'm also a big fan of, uh, Thetford Forest as well.

That's a favorite for my family and I, uh, where we go for dog walks and

I've just literally just come back from the North Norfolk coast last week.

We had some time away then.

Had a lovely week by the sea, so that was great.

That's been brilliant.

Thanks so much, Rhonda.

I really appreciate you coming and sharing your expertise on the show.

Could you remind everyone where is the best place for people

to connect with you online?

If you'd like to connect with me on LinkedIn, I'm

on LinkedIn, um, as Rhonda Jackson.

We've also got Jackson's CRS Limited on LinkedIn and Facebook.

Or you can go to the website, um, and complete our contact us form

and we can send out newsletters and that kind of thing to keep you

in the loop of everything that's happening debt recovery wise.

Yeah, so I'm happy for anyone to get in touch.

Awesome.

And Rhonda, can you please remind everyone about your, uh, website address?

Could you tell us that please?

Yeah, it's www.

jacksoncrs.

co.

uk and that's where we are for all your debt recovery needs or no win no fee.

Perfect.

Right.

Well, well, thanks again, Rhonda.

Next time, I'll be talking to Eileen round about how to write a great job ad.

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