What Is the Commercial Debt Collection Process?

What Is the Commercial Debt Collection Process?

Every commercial business will need help recovering money from clients at least once across its lifetime.

Regardless of how stringent your credit control procedures are, late payments of invoices can still slip through the cracks.

In recent years, this has sadly become normality within day-to-day life across every business sector. According to YouGov, around 68% of 500 businesses that were asked regularly have issues with late invoice payments.

Every organisation should have a robust B2B protocol for when situations like these occur. To try to negate this, many firms will add debt interest on the invoice if payments are late.

A clear debt collection solution is needed to successfully recover any form of payment that hasn’t been made.

Late payments can put you in a difficult position, and many believe the debt collection process can add to this stress. We understand why you would think this way, especially if you have no prior experience with this.

The commercial debt collection process can change based on each outstanding debt, however, the base steps are very similar.

The Steps of the Debt Collection Process

Collections procedures of debts should not have to feel like a chore, and it is more straightforward than one would think.

Contacting the debtor via phone calls or emails to make them aware of the late payments is usually the first step.

In many cases, the client may have genuinely forgotten when the payment date was and only need a reminder.

If this fails to produce the funds, the next step is to send a Letter Before Action (LBA).

This letter is sent to the debtor, outlining the matter and requesting payment within a certain period. If payment is not made within the time limit, legal proceedings will be undertaken.

Issuing proceedings or threatening legal action against the debtor is commonly enough to get them to pay. The debtor’s financial position may mean they cannot afford to have any legal processes brought against them.

Whilst you can undertake these steps yourself, this will only take time away from performing valued tasks for your business.

Instructing a professional to undertake the debt recovery process with enforcement actions is a far more beneficial position to be in.

Choosing the right professional method for you and your business can be a task in itself. After all, factors such as cost, success and time need to be taken into consideration.

Although instructing a solicitor to undertake the collection process is common, using a debt collection agency is the best option overall.

Federal Management’s Expert Debt Collection Process

Choosing the right debt collection agency is important, as making the wrong decision could leave you wasting time and money.

Federal Management is renowned as being the leading business debt collection agency in the United Kingdom. We are unrivalled across the industry in terms of both cost and success.

Upon speaking to our debt collectors, we will require all information and evidence related to the debt that is owed.

After we investigate the details we have been provided, we will provide you with a FREE pre-action assessment. This will give you an indication of how successful the debt collection will be.

We can also provide you with advice on any County Court Judgments, statutory demands, claim forms you may have etc.

Throughout our long history, we have built up the strongest recovery rates of 90% and above. Our commercial debt collection process is effective and proactive, leaving no stone unturned.

We are also authorised and regulated by the Financial Conduct Authority (FCA) to recover debts under the Consumer Credit Act.

To get the most out of the debt collection process, get in contact with our experts today.

Debt Collection Process Frequently Asked Questions

A client has not paid invoices on time, what should we do?

You should undertake the debt collection process quickly to have the best chance at recovering the money owed. This can be done in several ways.

What is the best debt collection method?

Whilst there are many methods available, the best option for you to be successful is to use a commercial debt collection agency. We have recovered millions of pounds worth of debts for our clients since 2004.

Does the debt collection process take a long time to complete?

Each case of debt collection will take a different amount of time to complete based on its circumstances. At Federal Management, we ensure to recover debts as quickly as possible.

What are your debt recovery commission rates?

Federal Management has the lowest commission rates in the United Kingdom from 6%.

Can you only collect commercial debts based in the UK?

We have registered offices across the UK and overseas, allowing us to provide a local, national and international service.

Posted on March 24, 2022