7 things not to do when somebody owes you money
7 Things Not to Do When Somebody Owes You Money
Every business, both large and small, in the UK faces the issue of non-paying clients every day.
If left unchecked, more and more clients will get away with not paying for services, and the business will suffer.
This is a recognised issue, and business owners take the task of debt recovery very seriously.
This is the reason most businesses have a credit-control process in place.
A credit control team is an excellent way to help ensure that clients make all payments on time.
It is important to recognise what you can and can not do when enforcing the collection of a debt ‘in-house’.
In this article, our debt collection experts explain the most appropriate ways to collect a debt.
We also explain what to avoid doing to prevent a situation from getting worse.
What to Do When A Client Does Not Pay
We understand that the act of chasing money that someone owes your business can often be challenging and frustrating.
A debt collection process is something that you need to handle appropriately.
With this in mind, it is in your best interests to be aware of the potential issues your actions can cause when you are trying to get your customers to pay you.
Ignorance is not an excuse, and there are laws in place to protect people regardless of the situation or circumstances.
Managing and running a business is already difficult, especially during current times.
The last thing any business owner wants is the task of dealing with those who do not want to pay you for any goods and services you have provided.
Being owed money is frustrating and stressful – this is a fact.
Despite these emotions, you should handle all matters relating to the collection of debt in a certain manner.
There is a fine line between what recovery methods are acceptable and unacceptable credit control actions.
There is a real danger that feelings of frustration could lead many to take very inappropriate actions.
You can take your own course of action can, but you must conduct everything in a civil and disciplined manner.
If you don’t, you may find yourself in hot water, which is the last thing anybody wants.
How to Handle a Client Who Doesn’t Pay
We have heard many stories of business owners that have felt personally wronged by a ‘cheeky’ client.
As well as this, a business owner can feel animosity towards those who attempt to get away with payment.
As such, many take a very robust approach to collecting money that someone owes them.
It is important to remember that one reckless or reactionary move with a business debt collection case…
…can result in the authorities becoming involved.
Not only does this exacerbate the matter, but it also provides your debtor with the perfect excuse to not pay.
Regardless of whether you are acting on behalf of a business or yourself, you must abide by the fundamental principles of law.
Federal Management has helped UK businesses recover unpaid fees and invoices since 2004.
We are the UK’s leading professional commercial debt collection agency.
Our expert debt collection agents have listed the seven traps you should avoid when recovering a business debt.
Whilst some of our recommendations may seem obvious, we do hear of mistakes like these that creditors make.
One key phrase could be, “Do not get angry, get even”.
When somebody owes you money, it is natural to feel frustrated
7 Things You Should Not do When Somebody Owes You Money
Never Become Abusive or Aggressive
Despite your frustrations, you should never become aggressive with the debtor.
Remember – you are the victim in this situation.
Maintaining the moral high ground is crucial.
You should perform communications should in a professional and factual tone.
Forcing you to react angrily might be exactly what the debtor wants you to do as this could give them grounds to not pay you at all.
By remaining calm and professional, you will not only project authority but also stop yourself from falling into this trap.
It is important to remember that even though a debt might not have been collected so far…
…the debtor may have a valid reason which you could resolve with a simple 5-minute chat.
Becoming angry with them might harm a relationship.
That relationship could have otherwise given you more business opportunities in the future.
Do Not Telephone an Individual More Than 3 Times In One Day
Depending on the situation, spamming the debtor with calls will is inappropriate.
In the worst-case scenario, it could be viewed that you are harassing the debtor, which will only cause you problems as the authorities step in.
It is right that you deserve to get paid for your goods and services rendered.
Yet, you should not give the debtor any grounds on which they could use to not pay you at all.
Do Not Use Social Media to Try to Collect Your Debt
Contacting a debtor on their personal social media is also inappropriate, and could be seen as harassment.
You should only contact a debtor via posted letters, emails or phone calls.
You should keep a record of all communications yourself in case you need to refer to them later.
If you begin to harass the debtor by using social media, it could have both civil and criminal ramifications.
Never Disclose Details with a Third Party
Simply put, it is illegal to discuss or disclose details to a third-party associate of your client unless someone has authorised you to do so.
Creating an embarrassing situation for a client who has not paid you will not help the situation and could work against you.
Never Become Violent or Threatening
Under no circumstances should you become violent or threatening with the debtor.
This WILL result in the police becoming involved, and only serve to worsen the situation for you.
Often, the debtor may become aggressive or threatening towards you.
If this happens, maintain your professional manner to defuse the situation.
Do Not Call your Customers at Unsociable Hours
It is unacceptable and inappropriate to call your client outside of reasonable hours.
For example, calling them at 5 am or 11:50 pm could be another form of harassment.
Only speak during reasonable hours.
If the debtor is in another country, call them during their time-zone’s appropriate hours.
Never Pretend to be Professional Debt Collectors or Solicitors
It is illegal to pretend to be a Solicitor or imply that you are a licensed debt collector enforcing a collection.
Escalating the Matter – Instructing a Commercial Debt Collection Agency
When collecting a debt in-house, you should only communicate in clear, professional and concise ways.
The debt collection industry is a lot more strategic than people think, and there are many potential traps that you must avoid.
The best way for you to recover a debt owed to your business is to instruct a professional debt collection agency.
If you have to learn every aspect of how to collect a debt yourself…
…you will only spend a great deal of time and money that you should otherwise have spent on growing your business.
Federal Management provides a fully inclusive commercial debt collection service.
This solution is the fastest way in which you can recover your money, and also is cost-effective.
Take action today and make a new start – Speak to our friendly new business advisers today by calling us on 0333 043 4420