Business to Business Debt Recovery Protocol

Business to Business Debt Recovery Protocol – Do You Have One?

Business to Business Debt Recovery Protocol

When you have provided goods or a service to a client, it is only right that you are paid for them and that you are paid on time!

It is no secret that businesses will face challenges with clients who do not pay their invoices on time or at all, and recent research has shown that this amount makes up around 57% of organisations in the UK.

Being paid for goods or services that you have provided is a fundamental aspect of maintaining a sustainable business, and in turn, will help to grow the organisation. This is extremely important in the current economic climate that we are faced with, and it is critical that a positive cash flow is maintained.

Most organisations have robust protocols in place within their accounts teams when it comes to unpaid invoices. This is so that when a debt occurs, there are procedures in place to tackle these quickly and efficiently.

Even if professional procedures such as these are put in place, it is still up to the client to pay, and this is not something that can be enforced unless taken further. We will discuss the methods of escalating this later on in the article.

Not taking action when it comes to the none-payment from clients is detrimental to the business, and will impact the welfare of your organisation if left alone. Thousands of organisations in the UK have struggled due to this – do not let yours be one of them.

In this article, our expert team of Debt Collectors have put together guidance which outlines the best Business to Business Debt Recovery Protocol, so that if, and when, the time comes to use this you are prepared and know what to do.

At Federal Management, we are dedicated to delivering the UK’s No1 Commercial Debt Collection solution and with that have demonstrated industry knowledge to help with all debt collection enquiries.

B2B Debt Recovery Protocol – A 4 Step Guide

You have several options when it comes to the recovery of a debt to your organisation, but it is always recommended to take a professional approach before escalating this to a higher power.

There are various reasons why a client may not have paid your invoice on time, and it is the job of the protocol we are going to outline that determines what these reasonings are.

The first step within the Debt Recovery Protocol is to send your client a reminder letter in the post. Sending a letter in the post is a common business practice when it comes to chasing unpaid invoices in the UK.

It is imperative that you keep the letter polite and professional, as maintaining good communication is one of, if not the main, key forms of solving any problem. In the letter you must explain clearly and precisely that there is an invoice that is overdue and that payment is requested.

Before any communication is sent out, make sure that you are addressing the letter to the person who is actually going to pay the invoice, as opposed to anyone else in the organisation (such as a ‘gatekeeper’, for example). This will prevent any difficulty in communication going forward.

If you have sent the first letter and have not received any word or payment from the debtor, it is now time to send an email with an attached statement of accounts.

It is recommended not to get angry at the lack of communication from the debtor, as it is very easy for letters to get lost in the post and/or misplaced when it actually reaches the organisation.

For this reason, it is good to send an email with the outstanding balance of accounts as it creates a multi-channelled communication approach and will reflect a professional demeanour.

Attaching the outstanding balance of accounts means the client can see how much they owe when it was due, and where to pay it. This should help answer any future questions if the client replies.

As stated above, make sure to always keep communications with t