Using a Business Debt Collection Agency

Using a Business Debt Collection Agency

Every business in the UK will have experienced some kind of issue with a non-paying client or unpaid invoices at some point. This can cause major disruptions to the company’s cash flow. At worst, it could make it difficult for them to fulfil their own financial obligations.

The issue of business debt must be taken seriously, and a failure to act when owed money can cause problems for any organisation.

Dealing with non-paying clients and overdue invoices in the most effective manner is often challenging. Many companies seek to outsource their credit control requirements to a third party.

In the past 20 years, it has become increasingly common for companies to utilise the services of a business debt collection agency. An agency provides effective debt recovery services as well as peace of mind.

This article examines the benefits of using a business debt collection agency, and how they help companies recover owed money.

The Benefits of Business Debt Recovery Services

Commercial debt can affect businesses of all sizes, and many do not possess the resources and expertise required to collect a debt themselves. Larger organisations often have a credit control department that can chase clients for payments. These teams chase payment through phone calls and emails, with some also sending letters. Even with this, their ability to enforce the debt is limited.

In addition, it can begin to cost a lot of money for businesses to recover a debt themselves. Many cases need to be outsourced to a professional commercial debt recovery agency anyway, even after a credit control team has performed their task.

Those agencies offering professional debt collection services are able to effectively recover a debt in a swift and law-abiding manner.

Federal Management, for example, is the only UK debt collection agency to be regulated by the Financial Conduct Authority (FCA). This means that we conduct all cases in a way that complies with the UK’s debt collection laws. This in turn helps to ensure that we provide the best peace of mind to our clients.

Business Debt Recovery UK – When Should You Use a Debt Collector?

Many company’s use a debt collection agency after their own credit control process has been performed. In recent times, it has become more common to use an agency as a standard part of their processes. In cases like this, an agency will be contacted within 30 days of an invoice being overdue.

When considering business debt collection rights, some organisations choose to add late payment interest charges to their invoices. This is an excellent way for the original creditor to provide an incentive for clients to pay on time.

It is important to act on an unpaid debt as soon as it is appropriate to do so. Most companies have payment terms of 30 or 60 days. If the payment has not been made after this time has passed, it is appropriate to contact a third party.

Company’s that do not pay what they owe can only expect to be chased for payment.

Instructing a Business Debt Collection Agency

If you are owed money by another business, you should contact a professional business debt collection agency to help.

Federal Management has helped hundreds of businesses recover millions of pounds worth of unpaid debt since our opening in 2004.

For more information on how we can help your business, speak to our friendly debt collection agents today.

Business Debt Collection Agency – Frequently Asked Questions

How Much Does a Business Debt Collection Agency Charge?

Every debt is unique and must be priced according to its own unique circumstances. Federal Management operates on a commission rate, starting from as little as 6% depending on the value, volume and complexity of the debts.

Can a Business Debt Be Recovered from A Company Based in Another Country?

Yes. If the debt can be recovered a collection agency such as Federal Management will be able to enforce it, regardless of where it originates. We have a trusted network of international collections partners that enables us to recover debt from virtually anywhere in the world.

Can Small Businesses Use a Business Debt Collection Agency?

Any business, regardless of its size, can use the services of a debt collection agency. Federal Management helps companies of every size recover bad debts every day.

What is the Business Debt Recovery Process?

Each case of debt collection is unique and must be looked at individually. For the best information on how a debt collection agency will handle your case, it is better to have a conversation to find out the information.

Should I Take Legal Action Against A Debtor?

Many businesses choose to take their debtors to court, and in some cases, this can help to recover the debt. However, it can be a very expensive option, as many solicitors and legal firms charge a great deal more for their services. This cost can lead to many businesses writing off the debt, as the cost of the collection becomes too great.

Posted on September 22, 2021