Debt Collection in South Africa
Debt Collection in South Africa
International trade has become increasingly popular in the present business sphere with many companies in the UK working with clients overseas.
South Africa is a country that the United Kingdom regularly exports to. It was recorded that the amount of UK exports to South Africa in 2020 was $1.68 Billion.
The UK and South Africa have always had a good trade relationship, with electricals, machinery and vehicles accounting for a large amount of the exports between them.
Whilst this is positive, there are times when UK businesses will not be paid for goods that they provide.
It is a fact of life that every business will encounter financial issues at some point. When these become more frequent, action needs to be taken to recover what is owed.
This can create a very stressful situation for business owners that provide services to overseas clients. International clients that do not intend to pay usually think they can get away with this due to the distance.
Are you the owner of a business that has not been paid by a client in South Africa? Have you carried out work for a company that is refusing to pay? You need to take immediate action to recover this.
Federal Management has a team of debt collection specialists that have the expertise and knowledge required to recover debts in South Africa.
Since 2004, they have successfully helped thousands of business owners recover what is owed.
Our experts have provided us with some details on how best a business can undertake debt collection in South Africa.
Process of Debt Collection in South Africa
A lot of business owners that are owed money wrongly perceive the international debt collection process to be more hassle than it is worth.
Of course, having outstanding debts that have not been paid can be extremely difficult for any business.
It is a case of having the correct skillset to successfully recover what is owed and an understanding of various factors that could affect the collection.
Language barriers, communication differences, laws and regulations can all alter how long it takes to recover the debt in question.
South Africa has laws that dictate debt collection practices, such as the Debt Collectors Act 114 of 1998.
There are also changes to how long you can collect a debt, which you would not know if you are inexperienced with debt collection in South Africa.
For example, the statute of limitations in South Africa is three years and in the United Kingdom, this is six years.
A professional solution will already have the expertise and knowledge of how debts can be recovered globally.
Choosing the right method when a debtor fails to pay will tick all the boxes relevant to the task of international debt recovery.
Debt Recovery Options in South Africa
Much like in the United Kingdom, there are many different ways that debt recovery can be carried out in South Africa.
It is natural for businesses that have credit control departments to attempt to recover any money that is owed by themselves.
Smaller businesses may not have the privilege of this and could end up wasting a lot of time on the collection of the debt.
Independently collecting a debt can use up time, money and resources that should be used to grow the business instead.
Thankfully, there are debt collection options available that are more beneficial to you and your business.
Debt collection solicitors have historically been a good way for businesses to get paid by their debtors.
There is a large network of law firms to choose from in South Africa that will find a resolution through the court system. Whilst this is a valid way of recovering money from an overseas debtor, it will come at a cost.
Solicitors fees alone are known to be expensive on top of the court costs that will accumulate. The total cost of using this method may end up being more than the debt is worth in the first place.
In order to recover a debt from a South African client in an affordable yet effective way, it is best to use a debt collection agency.
This has quickly become one of the most popular methods for UK businesses dealing with clients in South Africa.
Federal Management’s Debt Collection Solution
A debt collection agency, such as Federal Management, will use professional debt collection methods to recover money that is owed in a timely manner.
They provide businesses across the world with a comprehensive service that boasts success levels whilst minimising cost. This is accomplished by having local, national and global teams of debt collectors.
Businesses that are owed money by clients in South Africa may be worried that the collections process may damage the trade bond.
The debt collection process is undertaken to ensure that existing business relationships are not jeopardised.
Federal Management provides its clients with an average collection rate of up to 90% on debts that are undisputed. This is one of the reasons why they are known as the UK’s leading business debt collection agency.
Debt Collection in South Africa – Frequently Asked Questions
A client in South Africa owes me money, what should I do?
If a delinquent debtor owes you money in South Africa, you need to take action promptly. Using a debt collection agency is by far the most beneficial option available.
Is it difficult to collect money from a debtor in South Africa?
Many see the debt collection process to be a challenge, however, it is a case of having the right skill set to successfully recover money. At Federal Management, we have all the expertise needed.
How long can a debt from South Africa be recovered?
Different countries will have different time periods for how long a debt can be collected. Debts in the UK become statute-barred after 6 years and in South Africa, this is 3 years.
What is the cost of debt collection in South Africa?
The cost of debt collection is entirely based on the circumstances of the debt in question. Speaking to our debt collection experts will allow us to provide an accurate price to recover your debt.
How successful is international debt recovery?
Federal Management has an average recovery rate of up to 90% on undisputed debts. This will provide you with the highest chance of success.