At some point, every business has to face the dilemma of a customer who is unwilling to pay and refuses to cooperate with any efforts to make settlement. If yours is a relatively new business it may become the only time you have experienced the problem of late payment and required an agency to collect debt, even if it’s a well-established business, late payment will probably be an issue that occurs so frequently that you’re still not sure about the best method to address the issue and collect the amount owed.
Late payment or bad debt?
It is important to recognize that there could be reasons why you have not received your money and, if the amount owed isn’t disputable, the reason will most likely be that your customer is facing financial difficulties. If they’re unpaid, they will be unable to pay their other suppliers and some of them will also be thinking about taking action to collect debt. It is vitally important to act fast as the longer you are wasting on the process of chasing mail, emails, and phone calls the less chance you have of recouping the payment. If the first letter didn’t work and the second one did not, the third one will definitely not work and a different supplier could have instructed another third party to be paid.
There is the credit control process and procedure you adhere to and you have to ensure that this includes establishing the time when a late payment is a debt. The basis for this should be past payment history and industry-specific payment data. In certain industries and areas, payments after 60 or 90 days is not uncommon, in the construction industry for example. It is important to have a system of drawing a line in the sand which could be 30 days past terms or 45 days past the terms or whatever is the point that late payment is considered a debt. You must immediately refer the account to an unidentified third party for debt collection Manchester.
Debt collection solicitors
The letter of a lawyer is often enough to trigger an individual to take action, especially if they are threatened with Court proceeding. The problem with solicitors is the cost they charge, and you must be willing to pay a percentage of 20 percent or more on any money that is recovered. There are solicitors that provide a letter-before-action service for just PS2.00, but these letters are made to have no impact and are rarely leading to the payment you need, leaving the option of only requesting legal proceedings and paying solicitors hefty fees for representation in Court. It is also worth examining if you will actually get paid following the successful obtaining of the Judgment of Court. Lawyers do not take the time to thoroughly research the financial standing of the debtor as well as their capacity to pay. Your Judgment may be among the 40% of CCJ’s that are never paid. You may also have avoided the cash you have wasted on legal costs.
Debt collection agencies
Before you decide to issue legal action, it’s worth asking a debt collection service to handle your case. The majority of agencies now provide an no-cost, no-cost service, meaning there’s no chance of avoiding this avenue before taking legal action. Contact from a third-party debt collection agency, whether it a paid solicitor or an agency operating with a no-success-no commissions basis, can be enough to make it clear that they don’t want to pay debtors into paying up. It might not be enough to recover payment from businesses or businesses that are struggling and cannot pay, however, that is another reason to hire an agency to collect debt. Investigations by the agency into the debtor’s financial situation, future trading prospects and capacity to pay the debt, could lead to the recommendation to write off the debt and claim tax relief instead of paying Court or solicitors’ fees if there is no chance of ever receiving payment.
Menu
© Islington Stories 2024