An unpaid six-figure invoice can leave a finance director with an uncomfortable choice. Writing
it off damages the business. Pursuing it through a lengthy dispute may consume more cash
and management time, with no certainty about when payment will arrive.
The useful starting question is: what is the most commercially sensible route to recovering this
money?
Commercial debt recovery needs a plan that connects the strength of the claim with the
debtor’s ability to pay, the cost of each next step and an acceptable settlement outcome.
For founders and CFOs, that assessment should happen before another month of chasing passes
without progress.
Start with three separate questions
First, what supports the claim? Identify the agreement, the payment obligation, the work or
goods supplied and the evidence that payment is due. An invoice records an amount
requested; the supporting documents explain why it is owed.
Second, what can realistically be collected? A strong contractual position does not, by itself,
establish that the debtor has funds available. Consider what is known about the business’s
trading position and the legal entity responsible for payment.
Third, what would recovery require? A billing query, a genuine performance dispute and a
customer refusing to engage need different responses. Classifying the obstacle helps avoid
paying for an approach that does not address it.
Build a decision file before escalating
Give the person assessing the claim a short chronology, backed by the underlying records.
They should be able to understand the transaction without reconstructing months of email
exchanges.
Include the signed contract and amendments, invoices and payment history, delivery or
acceptance records, the customer’s stated objections and any payment promises. Record the
exact contracting entities and the amount still outstanding.
Separate agreed facts from assumptions. If the customer acknowledged the debt but disputed
one item, retain that distinction. If approval was verbal, say so. Identifying a weakness early
gives the business a chance to assess its significance before spending more money.
For a disputed software project, for example, a timeline linking agreed deliverables to
submitted work, feedback and acceptance can be more useful than repeatedly forwarding the
same invoice.
Compare net outcomes, not just headline amounts
A CFO needs to compare plausible cash outcomes across available routes: direct resolution,
specialist negotiation, mediation or formal proceedings where appropriate.
For each route, estimate the amount that might actually be collected, the time to receipt,
external fees, internal management time and further costs that could arise. Ask which
expenses remain payable if the attempt fails. Use ranges where uncertainty is substantial.
Consider this simplified illustration. On a £150,000 claim, a negotiated payment of £120,000
with £12,000 in total recovery costs leaves £108,000 before tax. Collecting the full £150,000
after £40,000 in total costs leaves £110,000 before tax. The £2,000 difference must be
considered alongside timing, collection uncertainty and the burden on the business.
These figures are hypothetical, not Payfor’s fees or a forecast. Their purpose is to show why a
larger settlement amount does not automatically produce a better commercial result. Any
expected recovery of costs from the other party should be assessed separately rather than
assumed.
Give negotiation a defined purpose
A useful negotiation process needs an owner, a clear statement of the claim and a specific
request for resolution. Ask the customer to identify precisely what is disputed and what, if
anything, they accept is payable.
Set internal review points. What response would justify continuing discussions? What evidence
is still missing? Who can approve a settlement, and within what limits? This prevents the
process from becoming another open-ended sequence of reminders.
The aim is to make a reasoned decision possible for both parties. A payment schedule may
address a temporary cash shortage; a documented response to a performance objection may
address a disputed liability. Neither should be offered automatically without understanding the
problem.
For claims in England and Wales, the relevant pre-action framework matters. The Civil
Procedure Rules’ Practice Direction on Pre-Action Conduct and Protocols emphasises
information exchange, proportionate steps and consideration of settlement or alternative
dispute resolution before proceedings. The applicable process depends on the claim.
Assess a settlement by its payment terms
An agreement to pay is valuable only if the arrangement is workable and properly recorded.
Review the amount, currency, payment dates, responsible entity and treatment of any
remaining balance with your advisers. If instalments are proposed, consider the exposure during the payment period.
- Who will monitor receipts?
- What happens if a payment is missed?
- Is there a commercial reason to believe this schedule is more reliable than earlier promises?
Bring the finance team into the discussion before a settlement is accepted. A payment
structure that looks reasonable in correspondence may still fail to meet payroll, supplier or
working-capital needs.
Understand what a success-based fee covers
A fee linked to recovery can help align the recovery provider’s incentives with yours. It still
needs to be understood in writing.
Ask how the fee is calculated, when it becomes payable and how partial payments or direct
payments from the debtor are treated. Confirm whether taxes, counsel, court, arbitration or
enforcement costs could arise separately and who must approve them.
Payfor describes its commercial recovery engagement as success-based and provides legal
escalation support through its international network. The scope and costs applicable to your
matter should be confirmed before you commit to a particular route.
Escalate when the evidence supports the next investment
A missed promise may justify a review, but escalation should follow an assessment of the
available route, likely costs and prospects of collection. The relevant court or arbitration forum
and the practical position of the debtor can change the economics substantially.
Ask for a staged recommendation: the next action, its purpose, its budget and the point at
which the strategy will be reassessed. Where time limits or urgent risks may affect the claim,
obtain jurisdiction-specific advice promptly; routine negotiations should not be assumed to
protect deadlines.
There are also cases where further expenditure is difficult to justify. A disciplined recovery
process should make that conclusion visible, alongside cases where a focused intervention has
a credible commercial purpose.
Give your unpaid claim a commercial assessment
If your team has exhausted routine chasing, bring the contract, invoice schedule, delivery
evidence and correspondence together. A clear file makes the next conversation more
productive.
Payfor works with businesses facing complex commercial payment disputes, including
international matters. Discuss your claim with Payfor to explore a recovery strategy, the
information required and the next steps appropriate to your circumstances.
Book a confidential, no-obligation discussion at payfor.global
General information only, not legal advice. Recovery options depend on the contract, facts and
jurisdiction. Obtain appropriate legal advice before taking formal action.