Collection Agency – How To Recover Unpaid Business Fees
Collection Agency – How To Recover Unpaid Business Fees
Is your business affected by non-paying clients and unpaid invoices? If so, you will need a reliable and effective commercial debt recovery option.
A companies cash flow is its lifeblood – if anything interrupts it, it could put the entire enterprise at risk. Occurrences such as unpaid invoices, client disputes and even absconded customers are all issues that business owners face.
In the UK, studies indicated the 4 out of every 5 businesses was affected by non-paying clients. In some instances, small business owners and corporate giants alike resorted to desperate measures to keep their company afloat.
Unfortunately, every company must deal with the issue of business debt eventually. There are always going to be certain clients that are “bad payers”. These people will go to almost any length to avoid paying what they owe.
If your business is experiencing debt, it is critical that you take steps to resolve it as soon as possible. Types of fees owing can vary from unpaid agency fees through to unpaid invoices.
Collection Process for Business – Credit Control
Regardless of the type of commercial debt, the original creditor will often already have a process for its recovery. For example, many companies have a credit control process that they follow in order to chase non-paying clients.
This is very common in larger companies but can cost too much if left unchecked. Despite being part of your business, the credit control team still incur a cost. This can mount up quickly, and especially if the recovery process is unsuccessful. The phone calls, emails, and time they use to recover the debt all contribute to this too.
In many cases the business owed money has very few enforcement options open to them. They can either stop the service that is being provided, add late payment charges, or hire a professional. A determined debtor will simply ignore any late charges, and may still withhold payment should service be ceased.
It is important to set a “cut off point” for your credit control team’s efforts. This may be up to 30 days after the payment is overdue. Once this time period has ended, it is better to instruct a professional debt collection agency such as Federal Management.
Preventing Bad Debt
In many cases, most instances of debt are best handed over to a collection agency business as soon as possible. There are ways to prevent them from occurring in the first place, however.
For example, many businesses implement payment terms or late interest charges into their agreements. These have the effect of providing an incentive for clients to pay on time.
Highlighting that a collection agency will be instructed should payment not be made is often a good step. This can sometimes be enough for a client never to consider withholding any amount owed.
Taking Legal Action – Debt Collection Solicitors
Many businesses decide to take legal action before considering other options. Historically, taking court action and hiring a solicitor has been a common method of collecting debt.
However, this is often an extremely time consuming and expensive option. It is no secret that solicitors can charge thousands for retainers when opening a dialogue with them. This is as well as requiring hundreds of pounds per hour to even begin looking at a case.
As well as this, there is usually no guarantee that payment will be fully repaid once a case is won. Lastly, many cases end with a County Court Judgment (CCJ) being made against the debtor. This is a good result, but must be enforced at a further cost.
Before choosing this option, you should always consider the services of a professional debt collection agency.
This is especially true for those businesses that may not be able to maintain the massive cost the legal route demands. Many smaller companies sadly have no choice but to resort to writing off the debt. This is due to the cost of the collection beginning to overtake the value of the debt itself.
Instructing Business Debt Collection Agencies
Instead of choosing other options, you should always consider instructing a professional collection agency. Collection agencies for small businesses and large organisations are often the best choice for all types of debt.
Professional debt collectors will be able to recover your money swiftly and effectively. This is whilst incurring a drastically lower cost than the alternatives. Many of the leading agencies operate on a commission structure that fits in well with their client’s budgets.
As well as this, specialist commercial debt collection agencies exist that are experts in recovering business to business debt.
Federal Management is one such agency and is widely regarded as providing the UK’s leading commercial debt collection services. Since 2004, we have helped thousands of businesses recover millions of pounds worth of unpaid debt.
We are regulated and approved by the Financial Conduct Authority (FCA). This hallmark means that we provide a fully regulated service, delivering the most professional option available.
Speaking with our debt collection experts is free and carries no obligation to proceed. We are one of the only collection agencies to provide a completely free pre-action assessment of all debt. This helps our clients understand exactly what their recovery prospects are.
If a debt can be recovered, then we will be able to do so. Our debt recovery rate is the highest in the UK, with an average 90% of all undisputed debts being recovered.
Find out how Federal Management can help you to recover a business debt, speak to one of our friendly experts now.