How to Find and Resolve Unpaid Business Debts

How to Find and Resolve Unpaid Business Debts

If clients miss a payment, or withhold it entirely, it can be a struggle to resolve. Businesses across the UK spend great amounts of time and money taking steps to prevent debts from occurring. When they do, it can take up even more resources to find a solution.

Businesses have to juggle the daily challenges they face with their own specialities. Balancing this with debt collection can often be a struggle.

Unfortunately, these factors combined mean that many debts are written off. With the impact of the Covid-19 pandemic still affecting many companies, this can be a blow to cash flow.

Debts should never be taken lightly. Businesses need to pay staff wages, bills and for their own supplies.

Reasons for Business Debts

There are a variety of reasons why a business might be owed money. For example, there could be some confusion over payment terms. Or, a client could dispute something related to work that has been carried out, delaying the payment.

In other cases, the business’s client might have gone into administration, leaving the supplier in a tricky situation.

Some companies may even feel hesitant to chase payment from a specific client. For instance, the client may be an even large company – a huge opportunity for the business. With this in mind, many consider chasing payment a risk. They worry that doing so may compromise future opportunities with that client.

There will be genuine reasons for not paying an invoice. In some cases, a debtor will deliberately withhold payment for as long as possible.

Many will lead you on with lame excuses. An example of one could be the classic “the person you want to speak with has left for the day”. Or, they could just purposefully ignore, or even spuriously claim your invoices were never received.

Due to the high volume of business that companies perform, many debtors that are “playing the game” will slip through. It is important to learn how to recognise and deal with debtors who are trying to get away without paying.

We recently wrote an article on the top 10 excuses debtors will try to use. This could be very useful if this is the case.

Many businesses resort to writing off debt once they have identified it. Their perception is that it will be too costly to recover it. Therefore, the only option would be to simply write it off.

If you have provided a good service, you deserve to be paid. In this situation, a professional business debt collection solution is a good option. Doing this will allow you to both recover the debt and focus your own efforts on growing your business.

Recovering Unpaid Business Debts

Once you have identified an unpaid business debt, you should take the necessary steps to recover it.

Many solutions exist, and some specialise in specific types of debt. For example, a business debt collection agency can focus on recovering unpaid invoices for large and small businesses.

Pursuing an unpaid debt via a small claims court is always an option. However, this can be very costly. Those doing this without the benefit of either legal advice or an expert debt collector may run into issues eventually.

Professional debt collection agencies are swiftly becoming the primary method of getting debts paid in the UK.

A debt collection agency will perform all tasks related to debt recovery on behalf of the original creditor. This includes chasing the debtor, as well as escalating the matter and taking legal action if necessary.

A debt collection agency is often a more effective way of enforcing bad debts. Non-paying clients are often more open to paying an agency. This is often because they come to realise that the original supplier is serious about getting paid.

As well as this, an agency will deal with the matter in the most appropriate manner possible. Some cases require a firm approach, whereas others respond more to a sensitive and fair process.

Federal Management’s team of expert debt collectors have countless years worth of experience when it comes to recovering debt. This experience makes us the leading choice for resolving unpaid business debts.

If your business is owed money by non-paying clients, speak to one of our debt collection experts now.

How to Find and Resolve Unpaid Business Debts – Frequently Asked Questions

What is Federal Management’s success rate on unpaid business debts?

Federal Management’s average debt recovery rate is 90% and above on all undisputed business debts.

How do I instruct Federal Management?

Speak to one of our debt collection experts now for more information. We will perform a free pre-action assessment of your debt to assess your chances of a successful recovery. If it can be recovered, we will do so.

Can an unpaid business debt from a client in another country be enforced?

Yes, overseas debts can be enforced by Federal Management. We have an international debt collection network that provides us with the means and expertise to recover debt globally.

How long does it take to recover an unpaid business debt?

This depends on the nature of the debt in question. Some cases are more complex than others, but it is difficult to say without knowing the particulars of the debt. Speak to one of our experts now for more information.

Should a business perform debt recovery themselves or hire a professional?

Whilst many businesses may begin the debt collection process alone, it is often unsuccessful as they possess few enforcement options.

Posted on February 4, 2022