If you've just discovered an old invoice that was never paid, then you might be wondering whether there's a limit to how old an invoice can be and still be valid to collect. Hopefully you might also be wondering is "How did this happen? Perhaps I should get a good bookkeeper or some help with credit control in my business!"
Business debts are covered by the Limitation Act 1980, this statute of limitations provides timescales as to how long a creditor can chase the debtor for an unpaid debt. Most companies donít realise that they are entitled to chase invoices that go back as far as 6 years.
It is important to remember that the time limit starts from when your customer last acknowledged owing the debt or made a payment on account against the invoice, not from when the invoice became due.
However, before you start trailing back through your ledgers and going all guns blazing to see who hasnít paid you need to pay notice to the following:
In theory no company should have invoices outstanding more 10 days past their terms let alone 6 years, just imagine the positive effect collecting on time will have on your cashflow. Credit control is a skill and for most businesses can be a very time consuming role Ė therefore it pays to outsource this service to a specialist company. The charges can be less than the cost of hiring an employee.
Do you have a very old invoice you're struggling to collect? Why not try our CreditXS debt collection service? Submit details of the debt online and we'll take care of it for you.
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