How Unpaid Invoices Can Impact a Business

Many business owners have experienced the sinking feeling that comes with unpaid invoices. When you first submit your invoice to a client, you trust in their honesty. After a month or two of non-payment, you might raise the issue with them directly – if they are making themselves accessible.

As the weeks and months roll by, the fear mounts that they will never pay – meaning you did the hard work and invested the resources for nothing. You might feel like you are out of options, particularly if you have nothing you can legally or possibly withhold from them to make them listen.

Here at Arida Lawyers we are specialists at debt recovery and are advocates for never letting go of money that you earned. Through our conversations with many frustrated creditors over the years, we have observed the terrible impacts that unpaid invoices can have. Here are just a few:

Inability to tackle new projects or make new sales.

Without money available, it can be impossible to act upon your ideas. Suddenly you may not be able to afford the services, materials and staff expenses that are essential to your operations, nor the outlay required to deliver your goods and services to your clients. Therefore, you may have to turn down profitable opportunities or to risk damaging your client relationships.

If working capital isn’t available, it can create delays.

By being unable to pay for goods and services, your whole operation may be slowed down, even as your regular expenses such as leasing, wages and licensing continue. The capital may need to be freed up to proceed, which can be a real issue when a promoted event or project is approaching that you had planned on the assumption capital would be available.

Deterioration of contractor relationship.

Your debtor’s decision to not pay you for a service they contracted you to complete may now unfairly impact your own relationship with those you contract. You may have to pull out from their services unless you risk not being able to pay, which would destroy trust and go against the principles of many business owners. This is assuming you had not already incurred the bill.

Psychological impacts.

On top of everything else, unpaid invoices are highly stressful. Fear of the consequences mentioned above can shatter wellbeing and preoccupy you from family and personal pursuits. Non-payment can make it hard to trust suppliers and contractors. Imagining worst-case scenarios impacts you and your behaviour. In turn it impacts the loved ones and associates around you.

If you have given the debtor a fair timeframe to meet their obligations and are out of options, call Arida Lawyers on 1300 146 390 or email info@aridalawyers.com. With legal services across consumer law, contract law, employment law and debt recovery, we are a results-focused firm with a proven track record.

We can give you a realistic assessment of your chances of successful debt recovery and represent your interests through the entire process – if in fact it ever goes to court. Sometimes the threat of the law is sufficient. Is it time you took your livelihood out of your debtor’s hands?

This article provides general information relevant to our expert services. It is not legal advice and should not be relied upon as such. If you are seeking legal advice, you should contact us for a free initial consultation.

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