Forum

• # 54712
• Wed 23 Feb 2011 01:35 PM

Hi all

looking for a bit of sage advice

One of my clients has not stuck to the payment terms and I am going tomorrow to collect the outstanding money as she has asked for a meeting to go over some work with her.  (I have said to her she needs to have the payment there for me).

Can I hold onto files or anything until I receive payment? (although I gave her last years accounts back together with the invoice I do have some of the current year's paperwork)

Someone told me this was common practice for Accountants, but to be honest I don't recall that happening in the places I worked.

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• # 54713
• Wed 23 Feb 2011 01:42 PM

The right to hold on to belongngs of others against an unpaid debt is known as a lien.

It can be used - but with great care. You could find yourself in difficulty if you retain papers which then prejudice the business of your client.

Far better to avoid if possible.

My practise is to a) set up the contract so that fees are payable on invoice b) to cease work immediately if anything is unpaid (and set that out as an option in the contract) and c) litigate using money claim online.

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• # 54714
• Wed 23 Feb 2011 01:53 PM

Thanks Geoff, that explains why I hadn't come across it - too messy legally.

Fortunately I wrote a relatively water tight engagement letter.  Just wondered if I could withhold if I needed to.

I'll go tomorrow and ask for the payment right away before the meeting starts.  That way any queries she was going to ask are knocked on the head.

Money Claim online looks good - it's a business based in Scotland, but another of my clients was looking for the way to claim against a business down south - I'll direct him there

Thanks again

Liz

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• # 54715
• Wed 23 Feb 2011 02:05 PM

I always forget that the law is different north (or south) of the border and that we have a UK wide (and indeed beyond) membership.

So of course my reply was based on English law (which ordinarily means England and Wales). It may not be possible to have  a lien in other jurisdictions or to litigate in the same way so the overall advice is to do research on the law applicable to your own jurisdiction.

Unfortunately clients being clients even the most watertight agreement can be broken and it is usually those of us who have done the work who suffer.

Fortunately for me I have only had £700 of bad debts in the past twelve years - and I put that down to the requirement  that payment is made on the day. The only time I vary this is if I go to a client weekly then I would invoice fortnightly.

Setting up a standing order is always a good idea - you can sell this as a cash flow benefit to clients even though it is really for your benefit.

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• # 54724
• Wed 23 Feb 2011 08:21 PM

Thanks to both of you for great advice.

And the Gentleman I spoke to at the legal helpline was super as well.

He had already posted an article on the ICB website regarding Lien which was well worth the read.

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• # 54729
• Wed 23 Feb 2011 11:41 PM

Hi Liz 

Just to say , as Geoff has said Scottish Law is different.  I have brought a couple of clients to court very easily and emails were excepted as form of contract.   I don,t think any letter of engagement would of helped as they were at it.  You can usually tell the signs but unfortunately misjudge their honesty in those cases but I did get paid after bringing them to court. 

I discuss this with Mr Carter the other day as to why less Scottish Members do a letter of engagement and that I would like to see more scottish law discuss, for example the laws for solicitor's accounts are different and students need to be aware when they study ICB module.

I am not sure I would pay a company to collect my debt, that is because I am tight fisted Irish women , not when it is so easy to go to the sheriff court anyway.   I have even used the sheriff court on behalf of my clients,   I am amazed how quick people pay up.  

I tried S/O for a while , and I have to say it was more messy then it was worth so I stoped.  Its probably my Irish blood but I would never pay anyone a S/O .  In fact when MFI asked for me to pay for my Kitchen before they put it in.  I cancel the contract and and went to a good guy in sterling and paid when the kitchen was finished.


My clients are pretty good at paying, and I have real trust with my clients they become your friends in a sense.  I don, t mind if they are a bit late in paying sometimes as they would always explain.   If I had a client that I need to watch my back with, their no longer my clients.  I get to upset with people like that and would prefer not to deal with them.  They are very welcome to go elsewhere as my family is more important.
 

Edited at 23 Feb 2011 11:46 PM GMT

• Sarah Douglas C.FICB

  HouseTree Business Ltd 

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• # 54733
• Thu 24 Feb 2011 01:47 PM

Happy Endings - dont you just love them:

Went this morning - she keep me waiting at reception for 10 mins ....didnt bode well. 

But the payment was lying on the table in an envelope - I think she was a bit embarrased at me having to ask either that or her Mother gave her good talking to.

I've explained why I need to be paid on time as my invoices are always for work all already completed.  So I guess she is still my client for now.

But at least I know the ins and outs for next time.

I let another Client pay by S/O as they had just started up and I used to work for their husbands'.  It's fine as it's constant work and at least I know I've got some money coming in monthly but I think like Sarah and Geoff any future clients will be payment on invoice.

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