Debt Recovery

Owed money and due debts

With so many businesses struggling as a result of the economic downturn it is no surprise to learn that debts between companies and their clients are going unpaid. The field of business law addresses the issues that may arise when this occurs.

In a survey by the Forum of Private Business, it was found that an astonishing 88% of businesses had experienced problems with their most important customers paying them on time. With a quarter of small businesses collapsing as a result of late payments, this is clearly a massive obstacle to overcome if you want your business to be a success.

Perhaps the best step to take in debt recovery is to prevent debt problems from occurring in the first place. You can do this by having a strict and efficient credit control system in place – making sure that all customers are subject to credit checks, that invoices and reminders are sent to clients promptly and that late-paying customers are dealt with swiftly and effectively.

There are several traits in the behavior of potentially tardy customers that should set alarm bells ringing should you notice them. These include:

• They are difficult to contact; your letters, e-mails and phone calls are beginning to go ignored
• They are reluctant to negotiate payment schedules
• They break promises to make payments
• They start to get excuses in early, e.g. by complaining about services or contracts

By identifying potential problem debts early, you will save time and money spent chasing delinquent customers further down the line. But when you find it’s too late and bad debts are starting to get out of hand and causing you massive inconvenience, it might be time to call in the services of a solicitor or a professional debt recovery firm (bear in mind that most businesses give late-paying clients 90 days before referring their case to a third party).

Debt collection agencies can send out a strong message, but be discerning if you choose to take that route - you don’t want to scare off your biggest customers completely.

Debt collectors also frequently charge a percentage of any payments collected on top of their regular flat fee, so be careful not to end up paying more than you had expected.

Arguably a safer and more cost-effective method of debt recovery is to engage the services of a solicitor. Just one letter or phone call from a solicitor can spur a debtor on to making a swift payment for fear of further legal action.

Our free Find a Solicitor service can help you find the best legal advice for all debt problems by putting you in touch with the finest business law solicitors around. Contact us today to see what we can do for you and your business.

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