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5 Tips on How to Recover Unpaid Invoices in 2022

5 Tips on How to Recover Unpaid Invoices in 2022

5 Tips on How to Recover Unpaid Invoices in 2022

In 2021, official government statistics showed that £23.4 billion worth of late invoices was affecting UK businesses.

As well as this, companies have had to contend with the effects of the Covid-19 pandemic.

Combined with the normal daily challenges companies face, this shocking statistic highlights the importance of an effective debt recovery solution.

Every business owner knows that if payments stop, the company is at risk. Organisations of every size in every sector have their own financial commitments. Without money coming in to contribute to cash flow, this can put any company in danger.

5 Tips on How to Recover Unpaid Invoices in 2022 | Get Expert Help From Debt Collectors Now

If you need help with the Recovery of Debt, our friendly team of Debt Collection Experts is happy to help you today,

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Recovering Unpaid Invoices – Internal Processes

Unfortunately, every company will face payment issues that must be resolved. For example, there may be an especially high maintenance client who takes a long time to pay. Or, a client based in another country may dispute an invoice, a process that can take months to resolve.

Naturally, many businesses have their own credit control staff who help to remind clients of payments. They also chase late payments and overdue invoices.

The disadvantage with in house teams like this is that the enforcement options are limited. Service based companies will be able to cease trading with a debtor in order to prompt them to pay. Doing this can prevent more losses, but will not recover the money owed if the debtor is determined.

For businesses that provide goods, once the client has received the product, there are very few options an internal team has. This is especially true if the debtor has provided false contact information.

When this happens, it is important to consider a professional solution. Escalating a matter like this can often be enough to prompt a debtor into paying what they owe. In other cases, a debtor might be more open to paying a professional debt collector once they realise the consequences.

How to Recover Unpaid Invoices – 5 Expert Tips

Unpaid invoices are always challenging to deal with. As well as the process of recovering the money, you need to handle the case properly. Sometimes, a firm approach is needed, whereas in other cases it is better to be sensitive.

For businesses, taking advantage of future opportunities should never be overlooked. Ensuring that debt recovery is handled correctly can help to develop client relationships.

As with any other field, debt collection is constantly evolving. Federal Management’s team of expert debt collectors are at the forefront of these developments.

By following our steps, you can help to ensure that invoices are paid on time. You will also know how to act when a payment is missed.

Setup Late Payment Charges on Invoices

Most small businesses in the UK operate on 30 day payment terms. In some cases, larger organisations have payment terms that can last up to 60 days, with others even up to 90.

This can cause some confusion, especially when your client operates on a different schedule to your own company. In reality, this should not matter, as payment should always be made according to what the supplier (you) has specified.

In recent years, it has become more common for suppliers to add late payment interest charges on their invoices. Doing so is a prudent step, as it can provide a reason for a client to pay on time.

Doing this can prevent invoices from becoming overdue, especially when the consequences are made clear.

Send a “Final Notice” Letter

If you have been in contact with your client and explained the situation, this does not mean they will pay. If you have provided written and recorded reminders and a client is still refusing to pay, you should take this step.

A final notice letter could also be referred to as a “Letter Before Action”. This is a common step when taking legal action against a debtor.

A final notice involves informing a debtor that you intend to escalate the case should payment not be made. A letter such as this should always be delivered physically by means of recorded delivery. It will signal your intent to pursue the matter through either a debt collection agency or via court proceedings.

Upon receiving this letter, the debtor will often pay what they owe. The prospect of court action or a debt collection agency’s involvement is too much for them to handle. This is especially true if they know they are in the wrong.

When writing a letter like this, you should always seek advice from an expert. A good example is to speak with a Debt Collection Agency like Federal Management.

Set up a Repayment Plan for the Client

In some cases, the client may have a genuine reason regarding why payment has not been made. They may be a business just like yours, and especially after the past 2 years, they might be in financial trouble.

If this is true, then handling the matter by suggesting a repayment plan could be preferable to alternative options.

This would involve working out a payment schedule that would allow them to make smaller payments over a period of time.

A good way to begin this is with them making a smaller lump sum, before making their regular payments. This is known as a part payment and can help you to recover some money right away.

This is a good step, as it ensures that you maintain good standing with your client whilst recovering the money.

If you do plan to use this option, speak with a debt collection agency like Federal Management first. Our experts can help you to understand what the best course of action is before committing yourself.

How to Recover Unpaid Invoices in 2022

Ensure all Information and Communications are Recorded

It is absolutely vital that you maintain a written record of all information and communications relating to your case.

Written communications should be in the form of email and letters. Verbal communication, such as talking on the telephone, should also be recorded if possible.

As well as this, you should store all documentation, such as invoices and contracts, that relate to the case.

This is important if legal advice or a debt collection agency became involved.

Instruct a Debt Collection Agency

In many cases, it may not be possible to continue the debt recovery process yourself. As mentioned, there are only so many enforcement options a business has available. If these have been exhausted, it is not cost effective to continue to chase a debtor in this manner.

When this happens, it is better to involve a professional debt collector.

Historically court claims and legal action have been used. However, it is far more beneficial to instruct a debt collection agency in 2022.

An agency will provide an effective enforcement service, handling the matter properly. As well as the obvious benefits, you will be able to grow your business and focus on value based tasks.

How to Recover Unpaid Invoices in 2022 – Instruct Federal Management

If you are struggling to resolve an issue with an unpaid invoice, speak to Federal Management now.

Our expert debt recovery department can take the necessary steps to enforce the collection of your debt.

Speak with a friendly debt collection expert now for more information.

5 Tips on How to Recover Unpaid Invoices in 2022 | Get Expert Help From Debt Collectors Now

If you need help with the Recovery of Debt, our friendly team of Debt Collection Experts is happy to help you today,

SPEAK TO A DEBT COLLECTION EXPERT

How to Recover Unpaid Invoices in 2022 – Frequently Asked Questions

How effective is debt collection?

Federal Management has an average debt recovery rate of 90% and above on all undisputed business debts.

What is the cost of using a debt collection agency?

Every case is different and is priced on its own merits. Federal Management has a low commission rate, starting from as little as 8%.

What can I do if my client has given us false contact information?

Contact a debt collection agency as soon as possible. A professional will most likely be able to track a debtor down if you have gathered enough information.

How long does it take to recover unpaid invoices?

This can depend on the circumstances of the individual case. For more information, speak with Federal Management now.

What if my client is based in another country?

Federal Management is known as the UK’s leading international debt collection agency. We are able to recover debt from virtually anywhere in the world. Speak to us today for more information.