Managing Unpaid Invoices: Your Guide to Pre-action Protocols

managing unpaid invoices

managing unpaid invoices

Managing Unpaid Invoices


Few things are as frustrating and challenging for therapists as when clients fail to pay for a session and you have to Manage unpaid invoices. This isn’t just a matter of missed income; it’s about the value and recognition of the professional service provided. Like many in the health and well-being sector, therapists often operate as small businesses. Each session count and every unpaid invoice can significantly impact the business’s financial health and its ability to serve clients effectively. A good starting point is to have a solid Therapy Agreement in Place; learn more here.

Next is understanding and employing the essentials of pre-action protocols for outstanding invoices. It is not just about getting paid—it’s about sustaining a private practice that offers invaluable support to many.

What Are Pre-action Protocols?

Before considering legal proceedings over an unpaid invoice, there are specific steps and practices that courts expect both you and your client to undertake. These guidelines are termed as pre-action protocols. In the absence of a particular protocol related to your scenario, adhering to the general pre-action conduct is imperative. Once you have followed these steps, you can go to the small claims court in the UK, which will cost around £35.

Key Goals of Pre-action Protocols:

  1. Facilitate the exchange of comprehensive information to clarify each party’s standpoint.
  2. Try to settle the matter amicably initially without resorting to courtroom proceedings.
  3. Ponder over alternative solutions such as mediation to reconcile differences.
  4. Minimize the expenses associated with dispute resolution.

Steps to Take:

  1. Original Invoice: Issue an invoice to your client that itemises the services, amount due, and payment instructions.
  2. Reminder Invoice: Send a gentle reminder if the original invoice was overlooked. Prompt them to communicate any queries or issues they might face during payment, facilitating an open dialogue.
  3. Pre-action Correspondence: Draft a precise letter presenting the claim’s specifics. This should encapsulate the services rendered, the outstanding amount, the rationale behind the amount, and prior efforts made to secure the payment. A response from the client is anticipated within 14 days. (A template for the pre-action letter is provided in the resource section of Therapist Corner.)
  4. Client’s Feedback: In uncomplicated cases, the client should respond within two weeks, either affirming or contesting the claim. If contested, they should justify their stance and present pertinent documents.
  5. Seeking Expert Opinion: Though uncommon, you can engage an expert to opine on the matter if necessary. Ordinarily, the expert’s fees are shared between both sides.
  6. Resolution Efforts: Prioritise settling the dispute amicably through open dialogue or alternative dispute resolution mechanisms.

Possible Consequences:

  • Overlooking alternative solutions or poor communication can lead to the court imposing supplementary costs on you if the matter escalates to legal proceedings.
  • Neglecting an invitation to engage in Alternative Dispute Resolution can inflate court expenses.
  • Ignoring these protocols can culminate in several repercussions, from bearing the opponent’s expenses to altered interest rates on any awarded sums.

A Crucial Note: When managing unpaid invoices, adhering to these protocols does not override the statutory timeframes for initiating legal action. Always be vigilant about these deadlines; exceeding them can give your client a plausible defence. Please seek independent legal advice.

Join Our Community at Therapists Corner. Navigating the nuances of private practice can be challenging, but you’re not alone on this journey. Visit Therapists Corner, our thriving community, for further guidance, shared experiences, and collaborative learning. Together, we’re stronger!

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