How to Recover Money Owed to You | Business Advice
How to Recover Money Owed to You
No matter the size of your business, if you have carried out work of any kind, you deserve to be paid.
Overdue payments can add up quickly and without warning, which can result in financial problems occurring.
Do you have clients not paying on time and need to know how to recover money owed to you?
You must take action to recover the money as soon as you are made aware of the unpaid invoice.
Federal Management’s expert debt collectors have created this guide to provide advice to businesses that are not getting paid.
How to Recover Money Owed to Your Business
Millions of business transactions are carried out across the UK annually, and whilst many are straightforward, some are not.
Ideally, the sales process should be as easy as providing the service, invoicing the client and then getting paid on time.
The Federation of Small Businesses reported that 400,000 small companies have shut down since March 2020 due to late payments.
When this goes the opposite way and clients refuse to pay on time, this can put you in a difficult position.
It may be that the client has simply not paid the invoice for no other reason than forgetting the payment date.
They could be experiencing financial difficulties which have pushed your payment to the back of the list of priorities.
You may have heard every excuse under the sun for why the amount owing to you has not been paid.
Clients may experience financial troubles, but the fact remains that the money they owe is still to be paid.
The cash flow of the organisation will be put in jeopardy if not, further threatening the longevity of the business.
Below is a selection of ways to help ease the pain of needing to recover debts from clients.
How to Recover Money Owed – Attempt to Recover the Debt Alone
When a client refuses to pay what is owed, you may attempt to recover the money owed to you internally.
Many businesses will have a credit control team that is dedicated to chasing payments and rectifying financial problems.
Those without should follow the pre-action protocol for money claims if they don’t already have a B2B protocol.
Chasing the debtor for payment, and sending a letter before action or statutory demand are common tasks when recovering alone.
A letter before action outlines that legal proceedings will be started should they fail to pay within a time.
For many, outsourcing other options may appear harder than simply trying to recover the money independently.
In reality, this may cost you a lot of valuable time that could be used to further grow the business. Wasting time with no clear sign of success is the opposite of being proactive.
How to Recover Money Owed – Legal Advice / Using Solicitors
An alternative option to recovering a debt independently is to seek legal advice from a Solicitor.
Throughout history, this has remained a common method for those needing to recover unpaid business accounts.
Actions such as charging orders, filling out claim forms and county court judgments are all part of the legal process.
The threat of legal action, especially court action, is usually enough to get them to pay what is owed.
A business or an individual (including sole traders) may think about using the small claims court for lower unpaid amounts.
Despite the positive nature of this option, using a Solicitor to recover your debts comes with an expensive price tag.
Some may charge hundreds per hour, which can be less than affordable for someone experiencing money issues.
When invoices go unpaid or payments are missed, a low-cost debt recovery solution is needed.
How to Recover Money Owed – Use a Debt Collection Agency
What if there was a recovery option available for businesses that were both successful and cost-effective?
Those wondering how to recover money owed will find the most success in using a commercial debt collection agency.
Federal Management has helped businesses worldwide recover money owed to them from delinquent debtors.
Since 2004, we have built up an unrivalled amount of experience and expertise in debt recovery.
Here are some of the main advantages of instructing Federal Management:
- Average debt collection success rates of 90% and above.
- We operate the UK’s lowest commission rates from as little as 6%.
- No Collection means No Collection Costs to pay.
- Our professional methods mean relationships stay intact.
We are also authorised and regulated by the Financial Conduct Authority, showcasing the calibre of service.
If you are owed money by one of your clients, do not hesitate to contact our experts today.
How to Recover Money Owed to You – FAQ
I need to know how to recover money owed to me, what should I do?
There are many options available for recovering money owed to you, all with different levels of success and cost. It is important to choose the right one for your business.
Can I recover a debt from a client by myself?
It is common for businesses to attempt debt recovery alone, however, it is better to use a professional.
Should I use a debt collection agency or a solicitor?
Solicitors are a popular method for the collection of money owed, although they can be expensive. Using a debt collection agency is both low cost and effective.
How much will it cost to use a debt collection agency?
Every case of debt is unique and must be priced according to its circumstances. Our advisors can provide a cost once they have asked a few quick questions.
Can money be recovered from individuals as well as businesses?
We specialise in commercial debt recovery, however, some agencies can recover debts from individuals.