Business Debt Recovery

A Beginners Guide to Business Debt Recovery

Executive summary about business debt recovery by Andrew Regan

Unfortunately, many small businesses are forced to close their doors within 12 months of starting up, and non-payment of customer accounts plays a large part in forcing a business to close.

Non-payment is a serious issue for businesses of any size. Late or non-payment of debts can cause serious cash-flow problems, resulting in your business facing many problems of it’s own – from unhappy staff to not being able to maintain supply-and-demand for other customers you may have. However, if you’re experiencing problems with getting paid then there are several steps you can take to ensure your debt recovery doesn’t impact too heavily on your business.

Trying to contact a customer or client about an unpaid bill can be difficult. Sometimes, however, it is necessary to consider legal proceedings against a customer in order to collect an outstanding debt. Taking legal action to reclaim an outstanding debt should be a last resort, and often the threat of legal action is enough to make your customers settle up. As a result, many outstanding debts find themselves passed to specialised debt recovery companies.

In the UK, there are many debt recovery companies available who can help reclaim outstanding debts, and these companies have the time, expertise and resources required to pursue customers who have outstanding debts. If you decide that legal action is necessary to reclaim an outstanding debt, companies such as Capquest offer solutions that can help reclaim your money.

One solution is to commission the debt recovery company to recover the debt on your behalf. Most debt recovery agencies are members of the Credit Services Association, who are the only National Association in the UK for companies that are active in relation to unpaid credit accounts, debt recovery agencies, tracing agencies and allied professional services.

How Debt Recovery Works For Businesses

Executive summary by : Gen Wright

If you owned a business for some time now, you may have seen the worst and experienced the most unlikely situations such as bad debt. There is hope for you in debt recovery.

According to a study carried out by Leeds University, 30% of bad debt is an outcome of cash flow issues, or badly managed systems that hold up invoice payments. Sometimes all you need for your debtors to release payment is a letter from a third party debt collection agency, explaining that they have been officially appointed to collect the debt from them. If you are worried that appointing a third party debt collection agency will spoil your relationship with your clients, don’t worry. In order to get results, you need to choose the best debt collectors in the industry. That is because commercial debt collection is a structured process. Let’s take a quick look at how it works.

1. Raise invoices for your clients as usual.

2. Keep pursuing payments by sending reminder letters, emails, and calling up your clients. If you don’t get paid within 60 days, this is termed as bad debt.

3. Contact a reputable debt collection agency for your debt recovery project.

4. Basically, they suggest that you send a “Letter before Action” letter, also known as the “The 7 day” letter. This letter specifies that if the client doesn’t release the payment within 7 days, a third party debt recovery agency will take over and recover the debt on the behalf of your company.

5. If the 7 day letter doesn’t get you the payment, a second letter will be sent to your client stating a specific date for making the payment or face a court order.

6. If the 2nd letter also doesn’t get the debtors to pay, then the debt recovery agency will get a court order to resolve this matter.

The debt recovery agency will keep you updated on the progress at every step.