Preparing your Debt Collection Process to protect your business
In recent months, there
is a concern for most businesses that clients/ customers or suppliers may enter
into financial difficulties without paying your invoices. Over the weekend we
have seen headlines in the news of the airline FlyBMI entering into Administration.
Here is our step by step advice on what you can do to prevent your business from suffering financial loss from unpaid debts before it becomes too late.
Make sure you have up to date contact details for your client/ customer
and contact name(s) [larger companies/ organisations may request invoices to be
sent to a different office].
Conduct a thorough review of your collection process – make sure you
have actions specified for different points in the process – i.e. days past
due, days since last payment or days since contact. It might only take a simple
telephone call with the client/ customer’s accounts team.
Your communication with the client/ customer informs them of the
consequences of not paying the invoice(s) by a certain date.
Communications with the client/ customer should be reported on your
system and followed up – don’t be afraid to be persistent. Keep a copy of all
correspondence with the client/ customer as this may prove useful later in the
If your client/ customer is struggling to pay its invoices on time it
might be wise to conduct a credit reference check against them or look into
their financial records a little more closely; most registered companies in the
UK have to file accounts which are free for the public to access.
If you are still struggling to get paid after following up, seek
he Debt Collection Centre
is a specialist debt recovery service offered by city law firm Devonshires offering a one-stop-shop for businesses suffering
from late payments. The team sends an initial letter before action on a
no-collection, no-fee basis and progresses the matter in-house through the
Courts using the firm’s specialist solicitors.
For speedy assistance in
recovering money owed or further advice on tightening up your debt recovery
process, please contact our specialist team.