Sooner or later every business owner will be in the situation of having to deal with a company that is refusing to pay up and will revert to searching for debt recovery solutions. Business debt collection is becoming more common among businesses, with last year seeing £12,567,889,275 worth of debt being owed in the UK. Now more than ever businesses need to have some sort of debt management plan or recovery debt recovery service in place to counteract anyone refusing to pay them.
Follow these top 5 tips to successful debt recovery.
1. Communication, Communication, Communication
The first thing to do with people who owe you money is to communicate with them. If they have fallen behind, set up a new payment plan for them to help clear their debt. Get it in writing and make sure they abide by them. You also need to be persistent. A contractual agreement has been breached if you have not received payment that is promised to you and you have every right to chase it up.
2. Debt Chasing Letters
You could start by sending debt chasing letters of your own; or you could pay a solicitor to send the letters for you. Another option is a letter sending service. Creditsafe offer a debt letter sending service called Debt Chaser. We send the letters for you to save you time and money and you can choose from a range of templates to use and you can control how often they get sent out.
3. Taking legal action
Make sure you have tried numerous times to contact your debtors in different ways e.g. letters, telephone, email, etc. If they are still not responding and have ignored all your advances, you have a debt problem and need to take legal action. Business debt collection is not always an easy process, so appoint a collection agency or bailiff, work with a third party organisation that buys the debt and secures the payment in return for a percentage of the invoice value, or submit your claim to the County Court. The Creditsafe system offer a solution called Debt score to make it easier for you. It allows you to search for the company that owes you money, and it then redirects you to a debt collection company to deal with your debtor.
However, do your research: No matter which route you choose, try to find external agents that understand your business and are happy to work according to challenging service level agreements (SLA’s) set up by you.
4. Going legal
A County Court Judgment (CCJ) orders a defendant to pay a sum of money to the claimant and is recorded on the Register of Country Court Judgments for six years. Taking a case to court should not be undertaken lightly and will involve making a payment into the court, which will consider your case but will expect to see that you have taken all reasonable steps to secure the payment by other means.
5. Working with bailiffs
Don’t be afraid to use bailiffs at the right time. A bailiffs job is to collect money that the courts have decided are owed by one organisation to another or, in some circumstances, owed directly to the courts. Most certified private bailiffs belong to an association, such as Bailiff Advice Online (www.bailiffadviceonline.co.uk) and the Civil Enforcement Association (CEA) (www.civea.co.uk) A certified private bailiff is the last port of call if a Magistrate’s Court fine is ignored, an arrangement defaulted, or contact cannot be made with the debtor.