The challenges of Debt Collection in Russia
Debt Collection in Russia
Russia is the largest country in the world and has a population of around 146.2 million people.
Its impressive population has provided global businesses with the opportunity to develop a positive trade relationship with Russia.
More specifically, there are thousands of businesses across the United Kingdom that provide goods and services to Russian companies. As such, in 2020 the total amount of UK exports to Russia was recorded at $2.76 Billion.
Machinery, vehicles and pharmaceutical products are the top three contributors to the total amount of exports. The variety of this has allowed businesses in all industry sectors to carry out work in Russia.
Despite the positive nature of these longstanding trade relationships, there are times when financial issues can arise. This is due to the wealth of business, meaning the chances for these issues to arise are higher.
In Russia, one of the most common types of financial issues is the owing of money.
It is no secret that UK businesses experience issues related to unpaid invoices as part of day-to-day business life. Whilst this is true, if Russian clients regularly withhold payments then action needs to be taken.
Failing to act quickly when you are owed money can result in cash flow becoming damaged and could in turn affect longevity. The lifeblood of any business is its cash flow and needs to be maintained to help the company survive.
Debt recovery is a positive route to take and will benefit both the business’s future and bank account.
Has your business recently had a client in Russia withhold payment for an invoice? Have goods and services been provided and not been paid for? If so, you need to seek a debt collection in Russia solution.
Federal Management is an expert in this field and has helped thousands of businesses collect overdue debts from overseas clients.
Recovering Debts in Russia – The Collection Process
Business owners that are owed money by overseas clients often perceive the debt collection process to take a long time.
We understand why this may be commonplace, as the distance could deter businesses from recovering amounts owed.
However, the collection process of Russian debts can be relatively straightforward if you have the right expertise.
There are factors to take into consideration when recovering debts from Russia, and an understanding of these is vital.
Factors such as language barriers, communication differences, time-zone changes, laws and regulations are all included in this.
Professional debt collections services will have specific knowledge on this, allowing them to effectively start the collection activity.
Debt Collection in Russia does not have to be a challenging exercise to undertake.
A plethora of ways of collecting debts are available and it is important to choose the correct one.
Methods for Debt Collection in Russia
When invoicing payment dates are missed and services are unpaid, it is normal for businesses to attempt debt recovery independently.
As mentioned, it is important to have the correct knowledge required to have the best chance of success.
Understandably, many business owners will be inexperienced in this due to its uniqueness. As a result, those that try and recover their debts alone may find this to be a challenge.
This will only waste valuable internal resources that should be spent growing the organisation.
There are alternative methods that can be chosen that can take the stress away from recovering this alone.
The use of law firms is a well-known way for UK businesses to recover what is owed by their Russian debtors. Historically, issuing legal proceedings against the debtor has been known to produce results.
There are around 300,000 lawyers in Russia alone, which could demonstrate why this method is so popular.
It is worth noting that the use of solicitors can be an extremely costly practise and may end up costing more than the debt is worth. This is due to the price-drip fee nature of the service and expensive hourly rates.
No business owner should have to spend a lot of money to undertake debt collection in Russia.
In order to receive an affordable service that still boasts effective results, we recommend using a professional debt collection agency.
Instructing An Agency for Debt Collection in Russia
Using a debt collection agency is by far the most efficient way to recover unpaid fees and will allow you to continue to grow the business.
Federal Management is renowned for being the UK’s leading commercial debt recovery agency. Since opening in 2004, we have helped recover millions of pounds owed by Russian debtors.
We operate a high rate of success with an average recovery rate of up to 90% on undisputed debts.
There are many advantages to using our debt collection solution, such as:
- Expert knowledge of specifically recovering debts from clients in Russia.
- Industry-leading recovery rates.
- Low commission rates from as little as 6%.
- A global network of debt collectors, allowing us to recover debts virtually anywhere.
- Our professionalism allows existing business relationships to remain intact.
If your business is owed money and you need debt collection in Russia, contact our experts today.
Debt Collection in Russia – Frequently Asked Questions
Can a debt be recovered from a client that is based in Russia?
Of course, debts can still be recovered regardless of where the debtor is based in the world.
What type of debts can be collected in Russia?
Every type of debt can be recovered from a debt collection agency, such as private and commercial debts.
How long can a debt be recovered in Russia?
Each country has its own laws related to statute-barred debts. In Russia, the statute of limitations is three years from the last acknowledgement of the debt.
What is the best way to carry out debt collection in Russia?
There are many ways that debt collection in Russia can be carried out, but it is beneficial to use a professional debt collection agency. They will provide you with effective results at a low cost.
How much will it cost to recover a debt in Russia?
The cost of debt collection is based on the circumstances of the debt in question. A cost can be provided following a conversation with one of our experts.