2 min read

Civil case for delayed payments

I had a chance of working with at least 10 SMEs. The most common problem they face is that the payments are stuck with customers and on repeated reminders they are not releasing the payments despite the fact that work is completed as per customer specification. The irony is that despite government support, SMEs do not use the legal channels to get back their payments.

For many delayed payments on digging I have seen that SMEs usually do a poor job of documenting invoices and work completion forms. Also, they are poor in documentation for scope change or additional work. If on the field customer asks something to be done, SMEs usually perform the work on verbal commitments. Most of times, if above defects were corrected by my customers, I have seen that ethical clients release payment for my customers.

In some of the cases, it is seen that many clients find unnecessary faults in the work or documentation or invoices and try to delay the SME payments. The big question which arises is that should SMEs wait after 60days payment period given to clients for releasing payment or should they go for legal fight in court with clients?

Most of the SMEs are afraid of legal battles and the fear of broken relationship with their client. My suggestion to such SMEs is that the more you keep avoiding the legal battles in anticipation for some miracle from customer end, the more market share you will lose as the client is going to malign you in the market.

I have a full ecosystem to bring all the documentation in place along with fighting a legal battle in SME court or a civil court. In most of the cases I have seen out of the court settlement and in few cases which were not settled outside, the SMEs have a higher chance of winning.

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