There’s a reason why cash is king if a business doesn’t have enough cash in the bank, simple things like paying the bills can become a nightmare.
Unfortunately for many small business owners, there are lots of factors working against them such as the plague of late payments that mean even a successful business can find itself being threatened with having the heating cut off.
Whatever the reason, here’s what to do if a business needs to catch up on debts to a supplier, and how it can handle these debts without losing service.
If a business misses your payments for its energy bills there is of course a risk of eventually being disconnected, but there are measures in place to ensure this is an absolute last case resort.
If 28 days pass and a supplier has not heard anything about an unpaid bill, it must first offer a chance to repay the money through a payment plan.
There is sometimes the option of using a prepayment meter. These work on a pay-as-you-go model, and a weekly amount will be deducted to pay off any debts.
Sometimes it may be the case that a business is missing payments because the tariff is wrong, in which case switching may be the way to go to reduce bills.
It may surprise you to know that a business doesn’t need to be in the black to switch as long as it has been in debt for less than 28 days, the option remains open. In this case, debts are added to the final bill from the original supplier.
Although this may sound like an initial burden, switching to a better tariff can mean saving money in the long run.
If the debt is long-standing, it must be repaid before switching is an option.
If a bill goes unpaid for 28 days, disconnection is a risk, but the business will receive notice in advance that should help it plan for it.
The business will also be informed of how to get reconnected, but this could mean a fee on top of repaying the debt owed. It’s a costly disruption, and one everyone would rather avoid.
Overall, if you are struggling to pay your energy bills, don’t bury your head in the sand.
Remember, if you get into arrears, it can affect your business” credit rating.