Collection Agency Advice – How To Recover Unpaid Business Fees

Proven Collection Solutions for Unpaid Business Fees

If your business is affected by non-paying clients and unpaid invoices, you will need a reliable and effective commercial debt recovery option.

A company’s 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 that 4 out of every 5 businesses were affected by non-paying clients. In some instances, small business owners and corporate giants alike resorted to desperate measures to keep their companies 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”, and these people will go to almost any length to avoid paying what they owe.

Types of fees owing can vary from unpaid agency fees to unpaid invoices. If your business is experiencing debt, it is critical that you take some of the following steps to resolve it as soon as possible.

Setting a Cut-Off Point for Recovery Efforts

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.

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, 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.

Preventing Bad Debt

In many cases, most instances of debt are best handed over to a collection agency 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.

Informing clients that an agency for debt recovery will be engaged if payment is not received can be an effective strategy. This approach often discourages clients from even considering withholding payment as it shows that you have dedicated systems in place to recover debt.

 

Why Choose Debt Recovery Over Costly Legal Action?

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.

Collection agencies for small businesses and large organisations are often the best choice for all types of debt, saving you costly legal fees and valuable resources.

Here’s why you may benefit more from employing a debt collection agency over a lawyer to recover your business debt.

Saves You Time & Money

It is no secret that solicitors can charge thousands for retainers when opening a dialogue with them. This can also cost hundreds of pounds per hour to even begin looking at a case.

Additionally, 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. This could also severely strain your relationship with the debtor.

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.

More Effective Approach To Debt Recovery

Before choosing court action, you should always consider the services of a professional debt collection agency. These agencies provide a more streamlined and cost-effective approach, leveraging their industry expertise and established processes to legally recover funds without lengthy legal procedures. 

As well as this, specialist commercial debt collection agencies exist that are experts in recovering business to business debt.

This is especially helpful 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.

Avoid costly legal fees — Partner with our award-winning debt recovery agency today!

Federal Management: A Leader Among Business Debt Collection Agencies

Federal Management 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) and Credit Services Association (CSA). This hallmark means that we provide a fully regulated service, delivering the most professional and efficient service.

Additionally, we do not charge abortive or hidden fees, meaning you know exactly what you’re paying for. 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 before committing to our service. 

If a debt can be recovered, only then will we take action, saving clients time and money. Our debt recovery rate is the highest in the UK, with an average of 90% of all undisputed debts being recovered.

Discover how Federal Management can turn your business debt into cash flow. Speak to one of our friendly experts now.

 

Posted on November 11, 2021