Cash flow has long been recognised as vital for the construction industry. Whilst some contentious outstanding debts are perhaps more difficult and time consuming to pursue, others may be simpler and can be lost sight of through the passage of time.

Payment of the final balance of retention is one obvious example. This is often due 6 months, 1 year or sometimes even longer after completion. By then, the focus has shifted on to new jobs and pursuing recovery may be overlooked.

In tough times, it may pay dividends to look once more at completed jobs to check if there are unpaid balances still due and, if so, to pursue them.

The overriding objective in any debt recovery process is to proceed quickly to maximise the chances of recovering money in an economical way. This necessarily involves taking the recovery action which is appropriate to the circumstances, and then selecting the methods of enforcement which are most effective in those circumstances.

Options available include demand letters, statutory demands and abbreviated forms of these and, if necessary, court action. There can be an automatic entitlement to interest due to The Late Payment of Commercial Debts (Interest) Act 1998 and it may be possible to secure the debt by way of arrestment or inhibition. The decision on the route to follow will depend on a number of factors, including whether a debt has simply been overlooked and the debtor just needs a prod to secure payment, or whether the debtor is playing hard to get - in which case more aggressive tactics may be required.

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