Recent research from the Federation of Small Businesses (FSB) has put the spotlight on the UK’s poor payments culture, which it says costs the UK economy £2.5bn each year and forces 50,000 small firms under.
The FSB has suggested a number of measures to help tackle the problem, but the issue of late payments for both small and large businesses is unlikely to be resolved any time soon.
For companies affected, time is of the essence. It is vital that action is taken quickly to recover money owed. The more time wasted on repeating the process of sending chasing letters, emails and telephone calls will diminish the chances of full recovery.
More often than not, if that first letter does not result in payment, a third letter is unlikely to add any value to chasing the debt.
Companies that need extra help recovering debt, often turn to debt collection agencies. Although these agencies have a role to play in the market, they are not solicitors. This means that they usually can’t progress legal proceedings, so have to outsource the matter to a law firm and its fees, which can be significant, are payable by the company affected.
The selling point of these agencies is usually the offer of a no-collection, no-fee service, but there are other options available too.
The 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.
As debtors receive a letter from city solicitors, it sends a powerful message to a debtor that the debt must be paid immediately. As a result, the vast majority of matters result in full payment together with accrued interest and costs or at the very least a response proposing a payment structure.
Should a debtor not respond, the Debt Collection Centre can start proceedings with a view to obtaining Judgment at the earliest opportunity and look to enforce the same in-house or as an alternative, present bankruptcy/winding up proceedings.
The results speak for themselves with recovery rates of more than 85%.
If you’re a business suffering from late payments, always take specialist advice and consider all options. By using a more specialist service such as the Debt Collection Centre, debt can be recovered more quickly and efficiently – without incurring unnecessary costs.
For further information or advice, please contact Robert Edge.